Lennar quarterly profit beats, but new orders fall

NEW YORK (Reuters) - Lennar Corp reported a higher-than-expected quarterly profit as the No. 3 U.S. homebuilder benefited from orders placed before the homebuyer tax credit expired, sending its shares up more than 5 percent.

For the third quarter ended August 31, Lennar posted earnings of $30 million, or 16 cents a share, compared with a year-earlier loss of $171.6 million, or 97 cents per share.

The results also benefited from a reversal of charges related to the company's use of faulty Chinese drywall, said FBN Securities analyst Joel Locker.

Lennar's earnings beat analysts' expectations of a profit of 6 cents per share, according to Thomson Reuters I/B/E/S.

Because of confusion over Lennar's tax rate, it was not immediately clear whether the company's reported earnings compared exactly with analysts' estimates. But even the profit of 12 cents a share, which was adjusted for the tax rate, beat Wall Street's expectations.

"The headline number was better than people expected," said Locker. "That was going to be the bad quarter, with the end of the tax credit, so there will probably be a relief rally that the numbers weren't that bad."

Revenue rose 14 percent to $825 million, topping Wall Street's expectations of $777.5 million.

But orders fell 15 percent to 2,624 homes due to the April 30 expiration of the tax credit in addition to unemployment and foreclosures that present a cheap alternative to new housing, Chief Executive Stuart Miller said in a statement.

The tax credit's expiration has disappointed homebuilders, which earlier this year had seen a rebound in sales that many hoped reflected improving fundamental demand.

Last week, Beazer Homes USA Inc cut its full-year order outlook after the expiration of the tax credit, saying potential buyers remain cautious amid high unemployment and continued foreclosures.

Shares of Lennar were up 5.1 percent at $14.71 in premarket trading.

At Friday's close, the shares had lost 36 percent of their value since hitting a 52-week high in April.

(Reporting by Helen Chernikoff and A.Ananthalakshmi; Editing by Lisa Von Ahn)