Tomahawk, WI 9/25/2013 (BasicsMedia) – Lennar Corporation (NYSE:LEN) is a major builder of homes with a market cap of around $6.95 billion. In addition to this, the company is also a formidable player in the provision of financial services. And if that is not enough, it also acts as an investor and manages funds which are invested in real estate assets. It constructs and sells both single-family attached homes as well as those which are detached. It purchases, develops and sells residential properties which it does either directly or through other sources. How does it perform well despite mortgage troubles?

 LEN On Expansion Program

 The company has embarked on a period of continued expansion at a time when others are afraid for fear of what might befall the mortgage industry. Remember that large banks in the U.S are already being forced to get rid of their employees working in their respective mortgage departments due to poor sales and performance which is nothing inspirational at all. Lennar enjoys a good reputation in terms of being one of the largest homebuilders in the U.S. The fact that it has thus far managed to stay in business and continues to do so is worth talking about.

 At a time when other homebuilders, regardless of how big or small they are, appear a bit hesitant in terms of expansion, LEN has been doing exactly that. It has moved into and spread its wings into Nashville where it now owns close to 40 new home sites which it seeks to develop. Its homebuilding operations currently extend to some 19 states in the U.S. Its operations cater for close to 46 markets which are located all over the U.S. In addition to its expansion efforts in Nashville, it has done the same in the recent days in Central Texas, Portland, Seattle and Atlanta.

 LEN Improves its Sales

LEN had been expected to turn in around $1.5 billion in sales. The company went one better when it reported sales amounting to $1.6 billion in its latest quarterly financial results. This was an increase of around 46% from the last results it posted for the same quarter in 2012. The company also reported an increase of about 14% in its unit sales. This was good but not considered to be at par with the 27% it reported in the previous quarter prior to this one which ended on August 31, 2013. Its gross margin also benefited from an increase of 170 base points.

 Higher Mortgage Rates Affecting LEN

The fact that mortgage rates are quite high thus keeping many potential homeowners from these businesses, has had some effect on how much LEN has made in the last quarter. I strongly believe that this company would have made more money had it managed to weather the poor performance in mortgages well. This would be difficult since it is a problem which affects the industry as a whole. Therefore, what LEN has succeeded to do thus far, is both commendable and gives it a base upon which it can continue to perform well and make money for investors.

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