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M/I Homes (MHO) to Report Q3 Earnings: What's in the Cards?

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M/I Homes, Inc. (MHO - Free Report) is scheduled to report third-quarter 2021 results on Oct 27, before market open.

In the last reported quarter, the company’s sales and earnings beat the Zacks Consensus Estimate by 25.9% and 64.2%, increasing 34.6% and 89.4% on a year-over-year basis, respectively. Markedly, the company beat earnings expectations in the last four quarters, the average being 63%. The upside was driven by robust demand for new homes, given the continuous momentum in housing market.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved 34.5% up to $3.55 over the past 90 days. Also, the estimated figure indicates an increase of 41.4% from $2.51 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $975.6 million, suggesting 15.1% growth from the year-ago reported figure of $847.9 million.

Factors to Consider

M/I Homes’ Homebuilding revenues for third-quarter 2021 are expected to have increased from the year-ago basis, backed by the company’s record backlog level and resilient housing market conditions. The company’s revenues are expected to improve for the quarter to be reported, backed by an increased number of home deliveries.

Furthermore, the higher average selling price of homes delivered is expected to have contributed to its top line. The imbalance in demand and supply of homes and rising material costs prompted builders to raise prices. Additionally, significant operating momentum coupled with strong brand-building efforts is likely to have driven the company’s performance in third-quarter 2021.

The Zacks Consensus Estimate for average home closing price of home deliveries for third-quarter 2021 is pegged at $413 million, suggesting an increase of 0.5% sequentially and 8.7% year over year. The consensus estimate for Homebuilding Revenue is pegged at $951 million, indicating 16.1% growth year over year. Notably, the Zacks Consensus Estimate for homes in backlog for the third quarter is pegged at 5,395 units, suggesting a 1.7% sequential decline from 5,488 homes. Nonetheless, the estimated figure calls for 19.8% growth year over year.

However, higher land and raw material costs are likely to reflect on the company’s third-quarter results.

 

MI Homes, Inc. Price and EPS Surprise MI Homes, Inc. Price and EPS Surprise

MI Homes, Inc. price-eps-surprise | MI Homes, Inc. Quote

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for M/I Homes this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP for M/I Homes is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in the quarters to be reported.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +2.66% and carries a Zacks Rank #2.

Otis Worldwide Corporation (OTIS - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #3.

Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3.