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NVR, Inc. (NVR - Free Report) reported lower-than-expected fourth-quarter 2021 results. Both the top and bottom lines lagged the respective the Zacks Consensus Estimate. Its earnings improved from the year-ago period despite revenue decline. Although the company has been witnessing strong demand for new homes, supply chain issues and inflationary pressure have been weighing on its performance.
Also, uncertainty regarding the extent and timing of disruption owing to the COVID-19 pandemic along with related governmental actions persist. Also, uncertain effects of economic relief efforts on the U.S. economy, unemployment, consumer confidence, demand for homes, and the mortgage market may put pressure on future operational and financial performance.
Inside the numbers
The company reported earnings of $89.09 per share, lagging the consensus mark of $100.34 by 11.2%. Nonetheless, the reported figure increased 16% from the prior-year figure of $76.93 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.23 billion for the reported quarter, reflecting a decline of 5% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.18 billion, down 4% from the year-ago level. The metric also lagged the consensus estimate of $2.48 billion by 12.2%. Gross margin improved 490 basis points to 24.4%.
New orders increased 4% from the prior year to 5,685 units. The average sales price of new orders rose 14% from the prior-year quarter to $454,900. The cancellation rate was 10% for the quarter compared with 12% in the year-ago period. Settlements were down 16% year over year to 5,100 units. Average active communities totaled 414, down from 465 reported for third-quarter 2020.
Quarter-end backlog on a unit basis increased 10% from the prior-year figure of 12,730 and 26% on a dollar basis to $5.78 billion.
Mortgage Banking: Mortgage banking fees decreased 14.8% year over year to $59 million. Mortgage closed loan production totaled $1.48 billion, down 11% year over year. The capture rate was 89% for the fourth quarter, down from 90% a year ago.
Financials
At 2021-end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.55 billion and $28.4 million compared with $2.71 billion and $63.5 million, respectively, at 2020-end.
2021 Highlights
Earnings for 2021 came in at $320.48 per share, reflecting an increase of 39% from a year ago. Total revenues of $8.95 billion jumped 19% from the 2020 level.
Both earnings and revenues of PulteGroup topped the Zacks Consensus Estimate and improved year over year on the back of a solid housing market backdrop and resilient economy.
Otis' earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Meritage Homes' earnings surpassed the Zacks Consensus Estimate and improved significantly on a year-over-year basis. Revenues also improved from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.
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NVR's Q4 Earnings & Revenues Miss, New Orders & Backlog Rise
NVR, Inc. (NVR - Free Report) reported lower-than-expected fourth-quarter 2021 results. Both the top and bottom lines lagged the respective the Zacks Consensus Estimate. Its earnings improved from the year-ago period despite revenue decline. Although the company has been witnessing strong demand for new homes, supply chain issues and inflationary pressure have been weighing on its performance.
Also, uncertainty regarding the extent and timing of disruption owing to the COVID-19 pandemic along with related governmental actions persist. Also, uncertain effects of economic relief efforts on the U.S. economy, unemployment, consumer confidence, demand for homes, and the mortgage market may put pressure on future operational and financial performance.
Inside the numbers
The company reported earnings of $89.09 per share, lagging the consensus mark of $100.34 by 11.2%. Nonetheless, the reported figure increased 16% from the prior-year figure of $76.93 per share.
NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.23 billion for the reported quarter, reflecting a decline of 5% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.18 billion, down 4% from the year-ago level. The metric also lagged the consensus estimate of $2.48 billion by 12.2%. Gross margin improved 490 basis points to 24.4%.
New orders increased 4% from the prior year to 5,685 units. The average sales price of new orders rose 14% from the prior-year quarter to $454,900. The cancellation rate was 10% for the quarter compared with 12% in the year-ago period. Settlements were down 16% year over year to 5,100 units. Average active communities totaled 414, down from 465 reported for third-quarter 2020.
Quarter-end backlog on a unit basis increased 10% from the prior-year figure of 12,730 and 26% on a dollar basis to $5.78 billion.
Mortgage Banking: Mortgage banking fees decreased 14.8% year over year to $59 million. Mortgage closed loan production totaled $1.48 billion, down 11% year over year. The capture rate was 89% for the fourth quarter, down from 90% a year ago.
Financials
At 2021-end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.55 billion and $28.4 million compared with $2.71 billion and $63.5 million, respectively, at 2020-end.
2021 Highlights
Earnings for 2021 came in at $320.48 per share, reflecting an increase of 39% from a year ago. Total revenues of $8.95 billion jumped 19% from the 2020 level.
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.
A Few Recent Construction Releases
PulteGroup Inc. (PHM - Free Report) reported solid results for fourth-quarter 2021.
Both earnings and revenues of PulteGroup topped the Zacks Consensus Estimate and improved year over year on the back of a solid housing market backdrop and resilient economy.
Otis Worldwide Corporation (OTIS - Free Report) reported strong earnings for fourth-quarter 2021.
Otis' earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Meritage Homes Corporation (MTH - Free Report) reported solid fourth-quarter 2021 results.
Meritage Homes' earnings surpassed the Zacks Consensus Estimate and improved significantly on a year-over-year basis. Revenues also improved from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.