Lennar Earnings Call Nuggets: Order Pace Versus Price, Market Specifics and Granularity

Lennar Corporation (NYSE:LEN) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Order Pace Versus Price

Paul Przybylski – ISI Group: Actually this is Paul Przybylski on for Stephen. I was wondering if you could go over your philosophy on order pace versus price and what you are focusing on now as we move through the year.

Rick Beckwitt – President: It’s Rick Beckwitt. It’s a delicate balance in the field. We are reviewing pricing weekly in every community across the country. We have been increasing prices probably every couple of weeks in some communities, at least once a month in all communities, and we balance the pace/price split really on a local basis. Our preference is to increase price over pace, particularly in communities where we have long position – a lot of home sites to close out ahead of us, and to the extent that we are at the back end of the community, we may move through that community without too much price increase because of the incremental overhead associated with the fewer deliveries.

Paul Przybylski – ISI Group: You spent $500 million on land. What’s your target for this year?

Rick Beckwitt – President: I think that you could probably count on about $500 million a quarter.