The two major hurricanes that walloped parts of the U.S. could start to affect home builders’ results, a report said.
Hurricanes Harvey and Irma hurt builders by flooding construction sites and sapping power in Texas and Florida, but the storms also could delay the recertification of homes for insurance purposes and prompt potential home buyers to rethink purchases, according to the report released Tuesday by Haendel St. Juste, an analyst and managing director at Mizuho Securities USA.
Mr. St. Juste said he expects builders margins could suffer as labor and material costs rise.
Miami-based Lennar Corp. was hit especially hard. Some 40% of the company’s revenue comes from areas impacted by the storms.
Lennar last week said it sustained no flood damage at Texas developments under construction and only minor damage to those in Florida, Atlanta and the coastal Carolina region. But it said that Hurricane Harvey had an impact on about 120 new orders and deliveries in its third quarter and projects the storm to delay about 130 deliveries in the fourth quarter, while Hurricane Irma will likely delay about 700 deliveries from the fourth quarter into fiscal year 2018.
Mr. St. Juste said he expects other national home builders to be affected, including Toll Brothers Inc., KB Home, DR Horton Inc. and PulteGroup Inc.
Write to Laura Kusisto at firstname.lastname@example.org