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MIAMI (AP) — Tariff concerns and a disappointing third quarter outlook are weighing on Lennar Corp.'s stock even as the homebuilder's second quarter performance topped analysts' estimates.
President Jonathan Jaffe said during a conference call that tariffs are a headwind on material cost.
"First, it was 10% tariff on Chinese goods that took place last September and then another 15% this June. On average, the impact to us was about $500 per home," he said.
Jaffe said that Lennar is in constant communication with its manufacturing partners about ways to help offset the impact of the tariffs.
Adding to the mix, the S&P CoreLogic Case-Shiller 20-city home price index rose 2.5% in April from a year earlier, down slightly from an annual gain of 2.6% in March. That's the smallest increase in nearly seven years. April is the 13th straight month that U.S. home price gains have slowed.
Lennar's stock slid nearly 6% in Tuesday afternoon trading.
Shares of other homebuilders also declined, including PulteGroup Inc., Toll Brothers Inc. and KB Home.
Lennar, based in Miami, forecast third quarter earnings of $1.25 to $1.35 per share. Analysts polled by FactSet are expecting considerably higher earnings of $1.51 per share. The company said its backlog of homes is down 3%, with the backlog dollar value down 10%.
Lennar Corp. earned $421.5 million, or $1.30 per share, in its fiscal second quarter. Revenue totaled $5.56 billion.
Analysts surveyed by Zacks Investment Research were calling for a profit of $1.13 per share on revenue of $5.11 billion.
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