Lennar FY 3Q17 Earnings Call Notes

General sense of optimism

“we’ve continued to see strength in the housing market through the third quarter and have seen new orders, home deliveries and margins continue to be in line with or above our expectations. Generally speaking, in spite of the often noisy political environment, there continues to be a general sense of optimism in the market as jobs are being created across the country and wages are generally moving higher.”

Labor shortage translating into wage growth

“The often discussed labor shortage in many sectors of the economy is translating into wage growth. And while much of the data collected by the government doesn’t seem to reflect significant wage growth, the customers visiting our Welcome Home Centers are reflecting an optimistic sentiment and an ability to afford today’s more expensive homes.”

Rick Beckwitt

Business recovering in Houston

” With regard to Houston and to Florida, let me just address that right now starting with Houston. The Houston market is slowly recovering. All of our communities are open and doing business today. From a trade standpoint, it’s consistent with what I said. Trades are tight in the roofing area, the drywall area as you’d expect because there was a lot of damage associated with the interior of the homes. Folks are – those trades are really chasing that insurance business and it’s slowly getting better. From a power standpoint, we’re really not having any power connection issues in the Texas markets. So that’s a good thing. On the sales side of the market, we’re having good traffic, good solid traffic where people want to buy. ”

Still no power in Southern Florida

“Florida is sort of a mixture between north and south. In southern Florida, we still do not have the ability to get power connections. And as a result of that, that’s slowing down the business. That will catch its way up. We have not had the ability to press the power companies because quite frankly they need to address other concerns before they do the new home market. We are doing some things that I think are unique. We’re running some conduit between curb and the home in order to accelerate the connection. So when the power companies come out there to do the connects, we should bring things on pretty fast.”