Shares of homebuilders climb on Lennar results

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NEW YORK (AP) — Shares of homebuilders climbed Thursday on news that Lennar Corp.’s fourth-quarter profit rose as home orders increased — and that the company’s CEO sees a trend in rising prices.

CEO David G. Flatt said he expects the home builder will be profitable this year and the company will ramp up hiring as it begins to add new home developments — a sign it is betting the real estate recovery, while shaky, will hold.

“Prices are no longer free-falling downward and, in fact in many instances, are actually starting to stabilize and even recover,” Miller said. “I feel comfortable today saying that this is a trend and not an anomaly.”

Miller said the housing market continued to move toward stabilization during the quarter. New home orders rose 3 percent to 2,652, the first year-over-year increase since the first quarter of 2006.

Lennar’s shares surged $2.05, or 15 percent, to $15.75 in afternoon trading.

Shares of other homebuilders also climbed higher. Hovnanian Enterprises Inc. rose 20 cents, or 5 percent, to $4.18; Meritage Homes Corp. added $1.27, or 6.4 percent, to $21; and shares of MDC Holdings Inc. advanced $1.82, or 5.6 percent, to $34.63.

Pulte Homes Inc. edged up 66 cents, or 6.4 percent, to trade at $11.03 and KB Home’s shares jumped $1.54, or 10.7 percent, to $15.90. Toll Bros. rose $1.28, or 6.8, to $20.22, while DR Horton Inc. gained 66 cents, or 5.7 percent, to $12.32, and Ryland Group Inc. rose $1.20, or 5.8 percent, to $21.84.

Lennar said it earned $35.6 million, or 19 cents per share, in the quarter ended Nov. 30. It lost $811 million, or $5.12 a share, a year earlier.

Without one-time items, the Miami-based homebuilder would have lost $284.9 million, or $1.15 per share.

A tax gain reported in the fourth quarter came from a change in federal accounting rules that allowed the company to reverse previous writedowns of deferred tax assets. But that benefit was offset by charges totaling 89 cents per share related to adjustments in the value of land and other write-offs.

The question now for the sector is what happens when the buyer incentives go away a month into the traditional spring home buying season.