Tariff concerns, 3Q outlook drag Lennar's stock down

Tariff concerns, 3Q outlook drag Lennar's stock down
FILE - In this Sept. 22, 2016, file photo, a sign advertises Lennar Corporation townhomes which are under construction at Chelsea Place in Tamarac, Fla. 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. Lennar’s stock slid nearly 6% in Tuesday, June 25, 2019, afternoon trading. (AP Photo/Lynne Sladky, File)

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 00 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 .25 to .35 per share. Analysts polled by FactSet are expecting considerably higher earnings of .51 per share. The company said its backlog of homes is down 3%, with the backlog dollar value down 10%.

Lennar Corp. earned 21.5 million, or .30 per share, in its fiscal second quarter. Revenue totaled .56 billion.

Analysts surveyed by Zacks Investment Research were calling for a profit of .13 per share on revenue of .11 billion.

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Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LEN at https://www.zacks.com/ap/LEN