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Beazer Homes (BZH) Q4 Earnings, Revenues Miss Estimates

MAS PHM DHI BZH

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Beazer Homes USA Inc. (BZH - Free Report) reported adjusted fourth-quarter fiscal 2016 (ending Sep 30, 2016) earnings of 33 cents per share, missing the Zacks Consensus Estimate of 42 cents by 21.4%.
 

Revenues, Orders, Backlog, ASP

Total revenue, that includes homebuilding as well as Land sales and other, came in at $632.1 million in the quarter, lagging the Zacks Consensus Estimate of $658 million by 39.8%. The reported figure was down a mere 0.1% on a year-over-year basis.

Total homebuilding revenue, accounting for 98% of the total, was $619.9 million, up 1.4% year over year. Of this, West region grew 14.7% and Southeast region rose 0.8%. However, East region was down 14.5% year over year.

Land sales and other contributed $12.2 million to total revenue, down 42.5% year over year.

Closing: Total closings during the quarter were 1,856 units, down from 1,896 a year ago. While closings rose in West region, the same declined in the East and Southeast regions during the quarter.

In fiscal 2016, total closings were 5,419 units, up from 5,010 units in fiscal 2015. West and Southeast regions registered higher closing, while East continued to lag.

New orders, net of cancellations: Total new orders were 1,346 units in the fourth quarter, up from 1,170 units in the year-ago quarter. All three regions registered higher net orders during the quarter. In fiscal 2016, total net orders dropped to 5,297 units from 5,358 units in fiscal 2015.

Total backlog: Total backlog as of Sep 30, 2016 came in at 1,916 units, down 6% year over year. Backlog was $652.7 million in value, down 2.2% from $667.7 million in fiscal 2015.

Average selling price or ASP from closings: ASP was $334 in the quarter, up 3.5% year over year.

New Home Orders were 1,346, up 15% year over year in the fourth quarter.            

Operating Highlights

Beazer Homes’ total gross profit came in at $102.4 million in the fourth quarter, down 4.5% year over year. Homebuilding gross profit was $100.7 million, down from $105.4 million a year ago. Homebuilding gross margin (excluding I&A and interest amortized to cost of sales) was 20.8%, down 50 basis points (bps) year over year.

Selling, general and administrative expenses, as a percentage of total revenue, were 10.6% in the quarter, up 30 bps year over year.

Peer Releases

Now, if we look at some of the other construction companies’ third-quarter releases, Masco Corporation‘s (MAS - Free Report) third-quarter earnings and revenues missed the Zacks Consensus Estimate. PulteGroup Inc.’s (PHM - Free Report) third-quarter earnings were in line with the Zacks Consensus Estimate while revenues missed the mark. Meanwhile, D.R. Horton Inc. (DHI - Free Report) exhibited a mixed performance in the fourth quarter of fiscal 2016 with earnings missing the Zacks Consensus Estimate and sales surpassing the same.

Zacks Rank

Beazer Homes carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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