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NVR Q4 Earnings & Revenues Top Estimates, Backlogs Up 40%

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NVR, Inc. (NVR - Free Report) reported better-than-expected fourth-quarter 2020 results. Earnings not only beat the estimates for the second straight quarter, but also improved year over year. Results benefited from robust demand for new homes on lower mortgage rates and a rising work-from-home trend in the United States.

The company reported earnings of $76.93 per share, which topped the consensus mark of $76.52 by 0.5%. Also, the reported figure grew 19.43% from the prior-year figure of $64.41 per share.

Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.34 billion for the reported quarter. The figure increased 20.4% on a year-over-year basis, backed by robust demand for new homes on lower mortgage rates.

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote

Segment Details

Homebuilding: Revenues in the segment totaled $2.26 billion, up 15.9% from the year-ago level. The metric, however, missed the consensus estimate by 4%. Settlements were up 12% year over year to 6,060 units.

Notably, new orders increased a notable 25% from the prior year to 5,485 units. Average sales price of new orders also inched up 4% from the prior-year quarter to $398,100. Cancellation rate was 12% for the quarter, down from 16% in the year-ago period.


Quarter-end backlog — on a unit and dollar basis — was up 40% and 46% from the year-ago quarter to 11,549 units and $4.57 billion, respectively.

Gross margin came in at 19.5%, flat year over year.

Mortgage Banking: Mortgage banking fees increased 85% year over year to $80.3 million. Moreover, mortgage closed loan production totaled $1.66 billion, up 17% year over year.

Financials

At fourth-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.71 billion and $63.55 million compared with $1.11 billion and $29.4 million, respectively, at 2019-end.

Zacks Rank & Peer Releases

NVR — which share space with D.R. Horton, Inc. (DHI - Free Report) , PulteGroup, Inc. (PHM - Free Report) and Lennar Corp. (LEN - Free Report) in the same industry — currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PulteGroup reported fourth-quarter fiscal 2020 (ended Dec 31, 2020) results, wherein both earnings and revenues topped the respective Zacks Consensus Estimate on solid housing gross margin.

Lennar — currently carrying a Zacks Rank #1 — reported better-than-expected results for fourth-quarter fiscal 2020 (ended Nov 30, 2020). The quarterly results benefited from higher operating leverage, cost control, and a resilient housing market. Also, solid execution of homebuilding and financial services businesses added to its bliss.

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