NVR Q3 Earnings Miss Estimates, Stock Up on Strong Margins
NVR, Inc. NVR reported mixed results for third-quarter 2022. This homebuilding and mortgage banking company’s earnings missed the Zacks Consensus Estimate and revenues beat the same.
Shares of this leading homebuilder increased 5.71% on Oct 26 as the top and the bottom line increased on a year-over-year basis.
Inside the Numbers
The company reported earnings of $118.51 per share, which lagged the consensus mark of $126.5 by 6.3%. The reported figure increased 37% from the prior-year quarter’s figure of $86.44 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 $2.78 billion for the reported quarter, reflecting growth of 15.9% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.74 billion, up 17.2% from the year-ago quarter’s levels. The metric also topped the consensus estimate of $2.49 billion by 10.2%. Settlements in the quarter were up 5% year over year to 5,949 units. The average selling price or ASP was $453,400, up 3% year over year.
Gross margin improved 140 basis points to 23.6%, buoyed by higher ASP.
New orders were down 15% from the prior-year quarter’s levels to 4,421 units. The average sales price of new orders rose 3% from the prior-year quarter’s figure to $453,400. The cancellation rate was 15% for the quarter, up from 9.2% a year ago. Average active communities totaled 423, up from 414 reported for third-quarter 2021.
Quarter-end backlog on a unit basis declined 11% from the prior-year quarter’s figure of 10,758 and fell 5% on a dollar basis to $5.09 billion.
Mortgage Banking: Mortgage banking fees plunged 36.5% year over year to $37.5 million. Mortgage closed loan production totaled $1.66 billion, up 2% year over year. The capture rate was 81% for the third quarter, down from 88% a year ago.
Financials
At the third-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $1.75 billion and $18.4 million compared with $2.55 billion and $28.4 million, respectively, at 2021-end.
Zacks Rank & Recent Construction Releases
NVR currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. PHM reported unimpressive results in third-quarter 2022. Quarterly earnings and revenues missed their respective Zacks Consensus Estimate thanks to prevailing industry headwinds.
Nonetheless, the metrics increased on a year-over-year basis.
RPM International Inc. RPM reported impressive results in first-quarter fiscal 2023 (ended Aug 31, 2022), with earnings and sales surpassing their respective Zacks Consensus Estimate and increasing on a year-over-year basis.
The upside was driven by the continued implementation of MAP operational improvement initiatives, double-digit sales growth across the segments and strong pricing offset supply chain woes, cost inflation, macroeconomic challenges and foreign exchange headwinds.
Watsco, Inc. WSO reported third-quarter 2022 results, wherein the company’s earnings missed the Zacks Consensus Estimate, but sales beat the same.
Nonetheless, WSO achieved higher sales and profitability, reflecting normalized residential HVAC equipment volumes, effective price realization, a continued shift toward higher-efficiency HVAC equipment and expansion in sales of other higher-margin HVAC products.
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