Meritage Homes Corp (MTH) Reports 50% YoY Increase in Sales Orders for Q3 2023
Meritage Homes Corp (NYSE:MTH) reports a 50% year-over-year increase in sales orders for Q3 2023.
Net earnings decreased by 16% compared to the same period last year.
The company closed 3,638 homes this quarter, a 4% increase from the previous year.
Meritage Homes Corp (NYSE:MTH) ended the quarter with $1.0 billion in cash and a negative net debt-to-capital of (1.0)%.
Meritage Homes Corp (NYSE:MTH), the fifth-largest U.S. homebuilder, released its Q3 2023 earnings report on October 31, 2023. The company reported a 50% year-over-year increase in sales orders, driven by accelerated cycle times and move-in ready inventory. Despite the strong sales performance, net earnings decreased by 16% compared to the same period last year.
Financial Highlights
Meritage Homes Corp (NYSE:MTH) reported home closing revenue of $1.6 billion for Q3 2023, a 3% increase from the same period in 2022. The company closed 3,638 homes this quarter, a 4% increase from the previous year. Despite the increase in home closings and revenue, net earnings decreased by 16% to $221.8 million, compared to $262.5 million in Q3 2022.
The company's home order value increased by 53% to $1.5 billion, and sales orders of homes increased by 50% to 3,474 units. However, the ending backlog value decreased by 45% to $1.6 billion, and the ending backlog units decreased by 41% to 3,608 units.
Management Commentary
Homebuying demand held steady in the third quarter of 2023 despite the elevated interest rate environment, as we continued to offer a full range of incentives to help buyers solve for a monthly payment. With the backdrop of life events creating a housing need for millennials and baby boomers and the ongoing shortage of existing home inventory for sale, Meritages average absorption pace reached 4.1 net orders per month this quarter," said Steven J. Hilton, executive chairman of Meritage Homes.
Financial Outlook
Meritage Homes Corp (NYSE:MTH) expects steady housing market demand in the near future. The company plans to continue investing in land inventory and steadily increase its community count over the next year or two. For Q4 2023, the company projects 3,500-3,700 home closings, which it anticipates will generate quarterly home closing revenue of $1.45-1.53 billion.
Balance Sheet and Cash Flow
Meritage Homes Corp (NYSE:MTH) ended the quarter with $1.0 billion in cash and a negative net debt-to-capital of (1.0)%. During Q3 2023, the company repurchased $45.0 million of common stock and maintained its quarterly cash dividends. The company also completed a redemption of $150.0 million of its 6.00% senior notes due 2025.
Explore the complete 8-K earnings release (here) from Meritage Homes Corp for further details.
This article first appeared on GuruFocus.
