NVR, Inc. NVR reported second-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate. The stock — which was up by just 0.4% on Jul 19 — has rallied 44.4% year to date compared with the SPDR S&P Homebuilders ETF XHB and S&P 500’s gain of 29.1% and 17.2%, respectively.
The country’s one of the leading homebuilding and mortgage banking companies reported earnings of $53.09 per share, beating the consensus mark of $45.15 by 17.6%. Also, the reported figure increased 8.2% from the prior-year quarter.
Total revenues (Homebuilding & Mortgage Banking fees combined) were $1.8 billion in the quarter, up 1% year over year on higher deliveries and prices.
Homebuilding: Revenues from the homebuilding segment were almost flat year over year at $1.76 billion. Settlements increased 2% from the year-ago quarter to 4,720 units. Average settlement price was $372.3k, reflecting an increase of 1.9% year over year.
New orders also increased 6% from the prior-year quarter to 5,239 units. Average sales price of new orders during the reported quarter was $358,600, reflecting a 5% year-over-year decline, mainly due to a continued shift to smaller and lower-priced products. A shift to markets with lower average sales prices added to the woes.
Gross margin in the quarter contracted 20 basis points to 18.9%. Also, income before tax dropped 2% from the year-ago quarter. Selling, general and administrative expenses were $112.2 million, up 5.3% from the prior-year quarter.
Backlog (homes sold but not settled) as of Jun 30, 2019 declined 6% from the year-ago period to 9,530 units and 9% (on a dollar basis) to $3.52 billion.
At the end of the reported quarter, average community count was 470, down from the prior-year level of 480 units.
Mortgage Banking: In the reported quarter, Mortgage banking fees rose 16% year over year to $42.7 million. Moreover, mortgage closed loan production totaled $1.23 billion, increasing 1% year over year.
NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote
As of Jun 30, 2019, NVR’s cash and cash equivalents for Homebuilding and Mortgage Banking were $861 million and $21.4 million compared with $688.8 million and $23.1 million, respectively, at 2018-end.
Currently, NVR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lennar Corporation LEN reported better-than-expected results in second-quarter fiscal 2019 (ended May 31, 2019), after missing estimates in the preceding quarter. Earnings and revenues increased on a year-over-year basis during the quarter.
KB Home’s KBH earnings and revenues beat expectations in second-quarter fiscal 2019. However, earnings and revenues decreased 10.5% and 7.2% year over year, respectively, in the quarter.
Upcoming Peer Release
PulteGroup, Inc. PHM is scheduled to report second-quarter results on Jul 23. The company’s second-quarter earnings are projected at 82 cents, indicating a 7.9% year-over-year decline.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lennar Corporation (LEN) : Free Stock Analysis Report
PulteGroup, Inc. (PHM) : Free Stock Analysis Report
NVR, Inc. (NVR) : Free Stock Analysis Report
KB Home (KBH) : Free Stock Analysis Report
SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research