(Reuters) -Lennar Corp said on Monday it expects supply chain challenges in the homebuilding industry to continue and forecast fourth-quarter deliveries below analyst estimates, sending the No. 2 U.S. homebuilder’s shares down as much as 3.4% in after market trade.
The U.S. housing market has faced labor supply issues over the past several months, causing shortages of lumber and other raw materials along with a rise in construction costs, while demand for new homes has been rising.
“During the third quarter, our company and the homebuilding industry as a whole continued to experience unprecedented supply chain challenges which we believe will continue into the foreseeable future,” Lennar Executive Chairman Stuart Miller said.
“The housing market has proven to be strong in the current environment as demand continues to outstrip limited supply.”
Sales of new U.S. single-family homes rose in July after three straight monthly declines, but housing market momentum is slowing as surging housing prices amid tight supply sideline some first-time buyers from the market.
Lennar flagged land supply chain challenges due to delays in permit approvals, and said it expects to deliver about 18,000 homes in the fourth quarter, compared with estimates of 20,343 homes, according to Refinitiv data.
Larger rival D.R. Horton Inc <DHI.N cut its annual revenue forecast earlier in the day, citing supply chain disruptions that included shortages and delivery delays in building materials along with tightness in the labor market.
Orders, an indicator of future revenue, rose 4.6% to 16,277 homes in the third-quarter, while deliveries increased to 15,199 units from 13,842 units. Average price for homes delivered rose by 8% to $428,000.
Excluding mark-to-market gains, Lennar earned $3.27 per share.
Net earnings attributable to the company rose 111% to $1.41 billion, or $4.52 per share, in the quarter ended Aug. 31.
Revenue rose 18.2% to $6.94 billion, above analysts’ average estimate of $6.87 billion.
(Reporting by Sanjana Shivdas in Bengaluru;Editing by Vinay Dwivedi)