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NVR Beats Q3 Earnings Estimates on Homebuilding Strength
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NVR, Inc. (NVR - Free Report) , one of the nation’s largest homebuilding and mortgage-banking companies, reported third-quarter 2017 earnings of $38.02 per share, surpassing the Zacks Consensus Estimate of $36.11 by 5.3%. The reported figure also rose 34% from the year-ago $28.46.
Total revenue (Homebuilding & Mortgage Banking fees) was $1.67 billion in the quarter, up 8% year over year on higher housing revenues and mortgage-banking fees.
Segment Details
Homebuilding: In the reported quarter, homebuilding revenues rose 8% year over year to $1.63 billion.
New orders climbed 21% to 4,200 homes, driven by demand growth in the housing markets served by NVR. Settlements increased 6% year over year to 4,158 units. Average sales price was $382,800, down 3% from a year ago due to a shift in new orders from higher priced markets to lower priced ones and slashed product prices.
At the end of the reported quarter, average community count was 479, down 1% year over year.
The company’s backlog totaled 8,855 homes (as of Sep 30, 2017), up 16% year over year. Potential housing revenues from backlog increased 15% to $3.4 billion.
Margins
Homebuilding gross margin expanded 230 basis points (bps) to 19.9% owing to a modest improvement in pricing along with moderating construction costs.
As a percentage of homebuilding revenues, selling, general and administrative expenses (SG&A) were 5.9%, down 30 bps year over year.
Mortgage Banking: In the quarter, Mortgage banking fees grew 13.6% year over year to $34.2 million. Mortgage closed loan production in the quarter totaled $1.12 billion, reflecting an increase of 6% year over year.
Masco Corporation (MAS - Free Report) is slated to release its quarterly results on Oct 24. The Zacks Consensus Estimate for third quarter earnings is pegged at 53 cents, showing an increase of 28.8% year over year.
PulteGroup, Inc. (PHM - Free Report) is slated to release its quarterly results on Oct 24. The Zacks Consensus Estimate for third quarter earnings is 59 cents, highlighting an increase of 38% on a year-over-year basis.
Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release its quarterly numbers on Nov 6. The Zacks Consensus Estimate for third quarter earnings is pegged at 76 cents, reflecting an increase of 138.5% on a year-over-year basis.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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NVR Beats Q3 Earnings Estimates on Homebuilding Strength
NVR, Inc. (NVR - Free Report) , one of the nation’s largest homebuilding and mortgage-banking companies, reported third-quarter 2017 earnings of $38.02 per share, surpassing the Zacks Consensus Estimate of $36.11 by 5.3%. The reported figure also rose 34% from the year-ago $28.46.
Total revenue (Homebuilding & Mortgage Banking fees) was $1.67 billion in the quarter, up 8% year over year on higher housing revenues and mortgage-banking fees.
Segment Details
Homebuilding: In the reported quarter, homebuilding revenues rose 8% year over year to $1.63 billion.
New orders climbed 21% to 4,200 homes, driven by demand growth in the housing markets served by NVR. Settlements increased 6% year over year to 4,158 units. Average sales price was $382,800, down 3% from a year ago due to a shift in new orders from higher priced markets to lower priced ones and slashed product prices.
At the end of the reported quarter, average community count was 479, down 1% year over year.
The company’s backlog totaled 8,855 homes (as of Sep 30, 2017), up 16% year over year. Potential housing revenues from backlog increased 15% to $3.4 billion.
Margins
Homebuilding gross margin expanded 230 basis points (bps) to 19.9% owing to a modest improvement in pricing along with moderating construction costs.
As a percentage of homebuilding revenues, selling, general and administrative expenses (SG&A) were 5.9%, down 30 bps year over year.
Mortgage Banking: In the quarter, Mortgage banking fees grew 13.6% year over year to $34.2 million. Mortgage closed loan production in the quarter totaled $1.12 billion, reflecting an increase of 6% year over year.
NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. Price, Consensus and EPS Surprise | NVR, Inc. Quote
Financials
NVR’s cash and cash equivalents totaled $611.1 million as of Sep 30, 2017, compared with $375.7 million as of Dec 31, 2016.
Zacks Rank
NVR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases in the Construction Sector
Masco Corporation (MAS - Free Report) is slated to release its quarterly results on Oct 24. The Zacks Consensus Estimate for third quarter earnings is pegged at 53 cents, showing an increase of 28.8% year over year.
PulteGroup, Inc. (PHM - Free Report) is slated to release its quarterly results on Oct 24. The Zacks Consensus Estimate for third quarter earnings is 59 cents, highlighting an increase of 38% on a year-over-year basis.
Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release its quarterly numbers on Nov 6. The Zacks Consensus Estimate for third quarter earnings is pegged at 76 cents, reflecting an increase of 138.5% on a year-over-year basis.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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