Lennar, the No. 2 U.S. homebuilder, reported a higher-than-expected quarterly profit, as it sold more homes at higher prices.
The company’s stock was up 3.8 percent at $54.75 in premarket trading on Tuesday.
Lennar said orders, a key indicator of future revenue for homebuilders, increased 11.8 percent in the second quarter ended May 31, matching the 11.9 percent growth in the first quarter.
Although robust job growth is supporting the housing market, builders have continued to complain about rising material prices and shortages of lots and labor.
Housing starts dropped 5.5 percent to a seasonally adjusted annual rate of 1.09 million units in May, hitting their lowest level since September 2016. Economists have attributed the decline to ongoing shortages of skilled labor and building lots, rather than demand for housing.
Contrary to recent reports on housing starts and building permits, Lennar said it was seeing “more of a reversion to normal” in the housing market.
Net income attributable to Lennar fell to $213.6 million, or 91 cents per share, in the second quarter, from $218.5 million, or 95 cents per share, a year earlier.
The quarter included acquisition-related expenses, which impacted Lennar’s margins.
Analysts on average had expected earnings of 78 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose to $3.26 billion from $2.75 billion.