Lennar misses Q3 EPS as orders and margins weaken

Lennar (NYSE: LEN ) released third-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. 6 billion, focusing on generating cash through affordability-driven home pricing.

6%. Lennar controlled 98% of its land through third parties, reducing balance sheet risk, and ended the quarter with 11,800 owned and 476,000 controlled homesites. 65. Strategic focus on inventory management and capital efficiency, with ongoing shareholder returns through share repurchases and dividends.

Management highlighted challenges in labor availability and the impact of market conditions on incentives and margins. Despite market volatility, Lennar maintains a cautiously optimistic outlook, supported by strong partnerships and strategic land management. Full Transcript Diane Bessette, Chief Financial Officer We were highly focused on generating cash by pricing homes to meet affordability. 6 billion.

8 homes per community. 1 homes per community, in Q2. As we continue to carefully monitor our inventory levels, our construction cycle time improved to 116 days, our lowest cycle time in history, reflecting the continued impact of our production efficiencies. Turning to land, we owned 2% and controlled 98% through third parties.

This configuration significantly lowers our balance sheet risk, especially in challenging markets. We ended the quarter owning 11,800 homesites and controlling 476,000 homesites. We believe our land portfolio of primarily optioned homesites provides us with a strong competitive position to continue to grow market share in a capital efficient way. 3 billion at quarter end, an increase of $265 million sequentially.

The deposit component of this balance remained flat with Q2, which is consistent with a relatively flat number of homesites controlled. The ACOR balance increase was primarily driven by an increase in reimbursements to be received from municipalities for completed land development, as well as a smaller net increase in capitalized option maintenance fees. 4 times and our return on inventory was just under 13%. We maintain our focus on increasing asset returns, which will enable us to capture more return upside when margins normalize in the future.

6% at quarter end. 7 billion outstanding under our term loan. Note that during the quarter we used cash to redeem $400 million of senior notes that matured on June 1st. Our next maturity is in June of 2027.

Consistent with our commitment to increasing total shareholder returns, we repurchased 3 million shares for $256 million and paid dividends totaling $119 million. Our stockholders' equity was approximately $22 billion and our book value per share was approximately $91. In summary, the strength of our balance sheet provides us with confidence and financial flexibility as we progress through the end of the year. And so with that brief overview, I'd like to provide guidance estimates for Q4.

Starting with new orders, we expect Q4 new orders to be in the range of 19,500 to 20,500 homes. With continued focus on matching start and sales pace, we anticipate our Q4 deliveries to be in the range of 22,000 to 23,000. As we maintain even-flow production and turn inventory into cash, our Q4 average sales price on those deliveries should be between $370,000 and $380,000. 7% to 9%.

As we continue to navigate this uncertain environment, all of these metrics, of course, are dependent on market conditions. We anticipate our Financial Services earnings to be in the range of $90 to $95 million. And for our Multifamily business, we expect a loss of approximately $25 million. For our Lennar Other segment, we expect a loss of approximately $20 million, excluding the impact of any potential mark-to-market adjustments.

For the combined homebuilding, joint venture, land sales and other categories, we expect earnings of approximately $10 million. 7% of total revenues, our tax rate to be approximately 25%, and the weighted average share count should be approximately 235 million. 65 for the fourth quarter. With that, let me turn it over to the operator.

OPERATOR (Operator) Thank you. We will now begin the question and answer session of today's conference call. We ask that you limit your questions to one question and one follow-up question until all questions have been answered. If you would like to ask a question, unmute your phone, press Star 1, and record your name clearly when prompted.

If you need to withdraw your question, you may use Star 2. Again, that is Star 1 to ask a question. And our first question comes from Susan McClary from Goldman Sachs. Plea