(Bloomberg) -- Shares of Lennar Corp. are rallying after the homebuilder reported results that blew past expectations in the firm’s first full quarter since completing its $5.7 billion acquisition of CalAtlantic Group Inc.
Second-quarter revenue and earnings per share both topped the highest expectations, and new home orders surged 62 percent from a year ago, compared with the 55 percent average estimate among three analysts surveyed by Bloomberg.
“Even with questions about rising interest rates, labor shortages, rising construction cost, and the macro international trade tensions, the housing market has remained resilient,” Lennar Chairman Stuart Miller said on the company’s earnings call Tuesday. “There continues to be a general sense of optimism in the market.”
Lennar shares climbed as much as 9.5 percent to $53.87 in New York trading. KB Home, which is scheduled to report second-quarter results on June 28, rose as much as 4.9 percent to $26.08. Other homebuilders including Toll Brothers Inc., D.R. Horton Inc. and PulteGroup Inc. also gained.
Lennar’s earnings beat could help the Miami-based builder bounce back after months of lackluster performance. The stock had dropped 22 percent this year through Monday’s close, underperforming the 18 percent decline in the S&P Supercomposite Homebuilding Index.
“Orders and margins exceeded projections while management’s commentary was upbeat, noting strong housing fundamentals and an ability to manage higher interest rates and construction costs,” Jade Rahmani, an analyst at Keefe, Bruyette & Woods, wrote in a note to clients. “We expect a positive reaction.”
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