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NVR Gears Up to Report Q1 Earnings: What's in the Offing?
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NVR, Inc. (NVR - Free Report) is expected to have generated lower earnings in first-quarter 2023 on a year-over-year basis. The downside is due to soft housing demand and higher costs.
In the last reported quarter, earnings and homebuilding revenues topped the Zacks Consensus Estimate. On a year-over-year basis, earnings and total revenues (Homebuilding & Mortgage Banking fees combined) increased 49.8% and 22%, respectively.
NVR’s earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, the average surprise being 6.9%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has decreased to $96.46 from $99.53 over the past 30 days. The estimated figure indicates a decline of 17.2% from the year-ago quarter. The consensus mark for revenues is pegged at $2.36 billion, suggesting a 2.2% increase from the year-ago reported figure of $2.31 billion.
NVR’s first-quarter Homebuilding revenues (accounting for 98.1% of 2022 total revenues) are expected to have increased slightly from the year-ago reported level on strong business model and higher home prices.
The uncertainty in the economy has led to moderate housing demand. Additionally, higher interest rates, supply-chain issues, material cost inflation and rising wages have been making homes less affordable for buyers. These are likely to have negatively impacted earnings and revenues in the first quarter.
The Zacks Consensus Estimate for Homebuilding revenues is pegged at $2.36 billion, which indicates an increase from the $2.31 million reported a year ago. The same for Mortgage banking fees is pegged at $57 million, whereas it reported $69.2 million a year ago.
NVR has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, but the ongoing affordability issues are expected to have put pressure on orders and backlogs in the quarter to be reported.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of -6.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank #3.
Stocks With the 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 on their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Owens Corning’s (OC - Free Report) earnings topped the consensus mark in all the last four quarters, the average being 12.9%. Earnings for the to-be-reported quarter are expected to decrease 22.5% year over year.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
URI’s earnings topped the consensus mark in all the trailing four quarters, the average being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.
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NVR Gears Up to Report Q1 Earnings: What's in the Offing?
NVR, Inc. (NVR - Free Report) is expected to have generated lower earnings in first-quarter 2023 on a year-over-year basis. The downside is due to soft housing demand and higher costs.
In the last reported quarter, earnings and homebuilding revenues topped the Zacks Consensus Estimate. On a year-over-year basis, earnings and total revenues (Homebuilding & Mortgage Banking fees combined) increased 49.8% and 22%, respectively.
NVR’s earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, the average surprise being 6.9%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has decreased to $96.46 from $99.53 over the past 30 days. The estimated figure indicates a decline of 17.2% from the year-ago quarter. The consensus mark for revenues is pegged at $2.36 billion, suggesting a 2.2% increase from the year-ago reported figure of $2.31 billion.
NVR, Inc. Price and EPS Surprise
NVR, Inc. price-eps-surprise | NVR, Inc. Quote
Key Factors to Note
NVR’s first-quarter Homebuilding revenues (accounting for 98.1% of 2022 total revenues) are expected to have increased slightly from the year-ago reported level on strong business model and higher home prices.
The uncertainty in the economy has led to moderate housing demand. Additionally, higher interest rates, supply-chain issues, material cost inflation and rising wages have been making homes less affordable for buyers. These are likely to have negatively impacted earnings and revenues in the first quarter.
The Zacks Consensus Estimate for Homebuilding revenues is pegged at $2.36 billion, which indicates an increase from the $2.31 million reported a year ago. The same for Mortgage banking fees is pegged at $57 million, whereas it reported $69.2 million a year ago.
NVR has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, but the ongoing affordability issues are expected to have put pressure on orders and backlogs in the quarter to be reported.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of -6.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank #3.
Stocks With the 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 on their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Owens Corning’s (OC - Free Report) earnings topped the consensus mark in all the last four quarters, the average being 12.9%. Earnings for the to-be-reported quarter are expected to decrease 22.5% year over year.
OC has an Earnings ESP of +3.18% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.51% and a Zacks Rank #3.
URI’s earnings topped the consensus mark in all the trailing four quarters, the average being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.