Lennar third-quarter profit drops to $284 million as new orders decline

Lennar Corporation (LEN) reported third-quarter net earnings of $284 million, or $1.19 per diluted share, down from $591 million, or $2.29 per diluted share, in the same period a year earlier, according to a regulatory filing on Tuesday.

Key takeaways

• Net earnings fell to $284 million, or $1.19 per diluted share, from $591 million a year ago.
• Total revenues reached $8.0 billion, compared to $8.8 billion in the third quarter of 2025.
• New orders decreased 9% to 20,879 homes, while deliveries fell 3% to 20,840 homes.
• Lennar lowered its full-year 2026 delivery target to between 80,000 and 81,000 homes.

Third-quarter results

Here's how the company did:

• Total revenues were $8.0 billion, down from $8.8 billion a year earlier.
• Homebuilding operating earnings dropped to $502 million from $760 million.
• Financial Services operating earnings were $130 million, compared to $178 million.
• Multifamily segment posted an operating loss of $3 million, compared to a loss of $16 million a year ago.
• Lennar Other segment reported an operating loss of $84 million, driven by mark-to-market losses of $53 million on technology investments.

Excluding mark-to-market losses of $53 million on technology investments and one-time items of $39 million, net, in the Financial Services segment, third-quarter net earnings attributable to Lennar were $294 million, or $1.23 per diluted share. Excluding $99 million in mark-to-market gains on technology investments in the third quarter of 2025, net earnings were $516 million, or $2.00 per diluted share, a year earlier.

Stuart Miller, Executive Chairman, Chief Executive Officer and President of Lennar, said, “Our third quarter 2026 results reflect consistent focus on our operating strategy of maintaining volume and production while navigating a challenging economic environment. While our earnings of $1.19 per share were below expectations, they reflect the nature of the environment in which we are operating, which has deteriorated since our last earnings call.”

“Mortgage rates increased through the quarter, with the 30-year rate at approximately 6.8% at quarter end and even higher since. Rates are responding as inflation remains above the Fed’s target, driven by geopolitical tension and higher oil prices. Additionally, consumer confidence has declined as rates and affordability have driven more consumers to slow their purchase decision. Nevertheless, even while market conditions have weakened, the overall housing environment remains constructive as housing shortages continue to drive demand from both primary buyers as well as ‘single-family for rent’ and ‘build-to-rent’ buyers.”

Deliveries, orders and backlog

Homebuilding revenues from home sales decreased 6% to $7.7 billion from $8.2 billion in the third quarter of 2025. Deliveries decreased 3% to 20,840 homes from 21,584 homes, with an average sales price of $372,000 compared to $383,000 a year earlier. New orders decreased 9% to 20,879 homes from 23,004 homes, and the backlog stood at 16,857 homes with a dollar value of $6.3 billion.

Gross margins on home sales were 15.8%, down from 17.5% in the third quarter of 2025. Selling, general and administrative expenses as a percentage of revenues from home sales increased to 9.2% from 8.2%.

Balance sheet and capital management

Lennar ended the quarter with $1.2 billion in homebuilding cash and cash equivalents. The company redeemed $400 million of 5.25% senior notes due June 2026 and had $650 million in outstanding borrowings under its $3.1 billion revolving credit facility. Homebuilding debt to total capital was 16.6%. During the quarter, the company repurchased 3 million shares of common stock for $256 million at an average price of $85.49 per share.

Fourth-quarter guidance

For the fourth quarter of 2026, Lennar expects new orders of 19,500 to 20,500 homes and deliveries of 22,000 to 23,000 homes. The company anticipates gross margins on home sales between 15.5% and 16.0%, average sales prices in the range of $370,000 to $380,000, SG&A expenses of 8.7% to 9.0% of home sales, and Financial Services operating earnings of $90 million to $95 million.

Why it matters

Mortgage rate increases and inflation have created affordability constraints that slowed purchase decisions, leading Lennar to moderate its full-year delivery expectations. At the same time, the company continues to leverage consistent construction volume to lower cycle times and construction costs per square foot.

By the numbers

| Metric | Value | Source | |---|---|---|> | Third-quarter net earnings | $284 million | Filing exhibit 99.1 | | Diluted earnings per share | $1.19 | Filing exhibit 99.1 | | Total revenues | $8.0 billion | Filing exhibit 99.1 | | New orders | 20,879 homes | Filing exhibit 99.1 | | Deliveries | 20,840 homes | Filing exhibit 99.1 | | Backlog value | $6.3 billion | Filing exhibit 99.1 | | Home sales gross margin | 15.8% | Filing exhibit 99.1 | | Share repurchases | $256 million | Filing exhibit 99.1 |

Next earnings conference call

A conference call to discuss the results will be held at 11:00 a.m. Eastern Time on Thursday, September 17, 2026, according to the press release. The call will be available on the investor relations section of the company's website.