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Lennar (LEN) sinks due to ‘whack-a-mole’ supply chain woes

By Susan Mate

17:56, 16 December 2021

Lennar house being built
Supply chain issues caused higher product costs - Photo: Shutterstock

Lennar (Nasdaq: LEN) stocks dropped about 4% Thursday after the home builder posted lower-than-expected fiscal Q4 results, citing supply chain gaps and related woes.

The Miami-based company, one of the largest home builders in the US, missed its quarterly profit estimates as pandemic-driven supply chain issues caused higher product costs, labour shortages and house delivery delays, the company said in a news release.

Lennar share prices opened at $108.86 Thursday and rose to $110.93 before dropping to $106.82. The share price settled at $109.37 by mid-afternoon.


A slight increase in home prices in the US helped the company report earnings of $3.91 per share, which was still below an anticipated $4.15 per share. Revenue was up 24% to $8.4bn vs a forecasted figure of $8.5bn.

Lennars home delivery backlogs at the end of the Q4 period ended 31 November sat at 23,771, a 26% increase from 18,821 backlogs in the same period last year. Home deliveries increase 11% to 17,819 homes.

Cycle time expands 

Our cycle time expanded about two weeks from the third quarter, driven by rapidly changing supply chain issues, co-CEO Jon Jaffe said.

Oil - Crude

74.50 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0136%
Short position overnight fee -0.0083%
Overnight fee time 22:00 (UTC)
Spread 0.040


16,001.20 Price
+0.470% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0


2,072.25 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30


0.63 Price
+0.240% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

The supply chain issues are creating a “game of whack-a-mole,” Jaffe added. 

To combat that, he told investors that senior executives spent six weeks this year visiting communities to build strategic trade partnerships and streamline supply chain efficiencies.

Disciplined house building 

Lennar has implemented stock-keeping unit reductions and is focused on maintaining a disciplined house-building start pace for 2022, Jaffe added.

In October, Lennar announced it was investing in Austin-based ICON, a pioneer of large-scale 3D printing, to build the largest-ever community of 3D-printed homes to date using innovative robotics and software. Ground will be broken in 2022 for a 100-home community in Austin, Texas.

Lennar inked a deal in November with construction technology innovator Veev to build a 102-home community northern California.

Read more: Supply issues and higher prices hit UK construction firms

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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