By Ankit Ajmera
(Reuters) - Lennar Corp
The warning overshadowed a 50 percent jump in quarterly profit and pushed Lennar's shares down as much as 9 percent.
Shares of rivals D.R. Horton Inc
Houston accounted for about 12 percent of Lennar's homebuilding revenue in 2013.
"We're well positioned (in Houston) but we're smart enough to know that as oil moves down, there may be some job loss, primarily more on the higher end, and it could impact pricing," a company executive said on a conference call.
The first oil industry layoffs have already been announced in Houston, with realtors there predicting a decline of up to 12 percent in home sales this year.
Lennar said it expected 2015 gross margin of 24 percent, down from 25.4 percent in 2014.
Florida-based Lennar is not the only one to warn on margins for the current year. Smaller rival KB Home
"Lennar as well as the overall industry's pricing power has peaked. We expect flat to somewhat down pricing going forward. This is going to lead to lower margins probably for the next couple of years," Jim Krapfel, an analyst with research firm Morningstar, said.
Lennar has so far been able to raise prices despite a choppy recovery in the U.S. housing market as it mainly caters to buyers looking to upgrade to a bigger home. Such buyers are generally not affected much by volatile interest rates.
The company's gross margin fell for the first time in three years in the fourth quarter ended Nov. 30.
Chief Executive Stuart Miller said he remained optimistic about the housing recovery, citing falling gasoline prices, low interest rates and the Federal Housing Administration's decision to cut premiums.
Lennar earned $1.07 per share in the fourth quarter, trumping the average analyst estimate of 96 cents per share, according to Thomson Reuters I/B/E/S.
Lennar's shares were down 6.3 percent at $42.88 on the New York Stock Exchange.
Up to Wednesday's close, the company's stock had risen about 20 percent in the past 12 months, compared with a 12 percent rise in the Dow Jones Home Construction Index <.DJUSHB>.
(Writing by Sweta Singh; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)
