We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NVR Gears Up to Report Q4 Earnings: What's in the Cards?
Read MoreHide Full Article
NVR, Inc.’s (NVR - Free Report) fourth-quarter 2023 earnings and homebuilding revenues are expected to have declined on a year-over-year basis. The downside is quite likely to have been driven by high mortgage rates and dwindled average sales prices of settlements.
In the last reported quarter, earnings topped the Zacks Consensus Estimate by 11.1%, while the homebuilding revenues missed the same by 3%. On a year-over-year basis, earnings and homebuilding revenues decreased 5.7% and 8%, respectively.
The company’s earnings topped analysts’ expectations in 17 of the trailing 22 quarters.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) has increased to $118.63 from $118.58 over the past 30 days. The estimated figure indicates an 11.1% decline from the year-ago quarter’s reported earnings figure of $133.44 per share.
The consensus mark for homebuilding revenues is pegged at $2.57 billion, suggesting a 3.6% decline from the year-ago reported figure of $2.67 billion.
NVR’s homebuilding revenues (which accounted for 97.8% of total revenues in third-quarter 2023) are expected to have declined on a year-over-year basis in the fourth quarter due to the decline in settlements amid higher mortgage rates.
Although the company’s homebuilding revenues are likely to have witnessed tough year-over-year comparisons, NVR is expected to generate sequentially higher revenues, given the lack of existing homes inventory. Furthermore, the company’s acquisition strategy, accompanied by reduced cancelation rates, is likely to have helped it partially offset the negative impacts of the aforementioned headwinds.
For the quarter, our model predicts the average selling price of settlements to decline 3% year over year to $449,900. Also, we anticipate total settlements to decline 0.2% to 5,739 units on a year-over-year basis.
Meanwhile, the bottom line of NVR is quite likely to have been affected by material cost inflation and rising wages. We expect the homebuilding selling, general and administrative expenses to increase 21.9% year over year. Also, we expect income before tax (homebuilding segment) to decline 14.7% year over year to $467.6 million.
What our Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR this time around. 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 -4.38%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank of 2.
Stocks Poised to Beat on Earnings
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 quarter to be reported.
LPX’s earnings for the to-be-reported quarter are expected to decline 18%. The company reported better-than-expected earnings in three of the last four quarters but missed on one occasion, the average surprise being 98.3%.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +1.45% and carries a Zacks Rank #3.
MLM’s earnings topped the consensus mark in all the last four quarters, with the average being 37.3%. Earnings for the to-be-reported quarter are expected to rise 30.6% year over year.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +0.45% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25% year over year.
Image: Bigstock
NVR Gears Up to Report Q4 Earnings: What's in the Cards?
NVR, Inc.’s (NVR - Free Report) fourth-quarter 2023 earnings and homebuilding revenues are expected to have declined on a year-over-year basis. The downside is quite likely to have been driven by high mortgage rates and dwindled average sales prices of settlements.
In the last reported quarter, earnings topped the Zacks Consensus Estimate by 11.1%, while the homebuilding revenues missed the same by 3%. On a year-over-year basis, earnings and homebuilding revenues decreased 5.7% and 8%, respectively.
The company’s earnings topped analysts’ expectations in 17 of the trailing 22 quarters.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) has increased to $118.63 from $118.58 over the past 30 days. The estimated figure indicates an 11.1% decline from the year-ago quarter’s reported earnings figure of $133.44 per share.
The consensus mark for homebuilding revenues is pegged at $2.57 billion, suggesting a 3.6% decline from the year-ago reported figure of $2.67 billion.
NVR, Inc. Price and EPS Surprise
NVR, Inc. price-eps-surprise | NVR, Inc. Quote
Key Factors to Consider
NVR’s homebuilding revenues (which accounted for 97.8% of total revenues in third-quarter 2023) are expected to have declined on a year-over-year basis in the fourth quarter due to the decline in settlements amid higher mortgage rates.
Although the company’s homebuilding revenues are likely to have witnessed tough year-over-year comparisons, NVR is expected to generate sequentially higher revenues, given the lack of existing homes inventory. Furthermore, the company’s acquisition strategy, accompanied by reduced cancelation rates, is likely to have helped it partially offset the negative impacts of the aforementioned headwinds.
For the quarter, our model predicts the average selling price of settlements to decline 3% year over year to $449,900. Also, we anticipate total settlements to decline 0.2% to 5,739 units on a year-over-year basis.
Meanwhile, the bottom line of NVR is quite likely to have been affected by material cost inflation and rising wages. We expect the homebuilding selling, general and administrative expenses to increase 21.9% year over year. Also, we expect income before tax (homebuilding segment) to decline 14.7% year over year to $467.6 million.
What our Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR this time around. 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 -4.38%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank of 2.
Stocks Poised to Beat on Earnings
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 quarter to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +6.43% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
LPX’s earnings for the to-be-reported quarter are expected to decline 18%. The company reported better-than-expected earnings in three of the last four quarters but missed on one occasion, the average surprise being 98.3%.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +1.45% and carries a Zacks Rank #3.
MLM’s earnings topped the consensus mark in all the last four quarters, with the average being 37.3%. Earnings for the to-be-reported quarter are expected to rise 30.6% year over year.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +0.45% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.