NVR, Inc. NVR reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancellation rate increased in the quarter, growth in new orders is encouraging for the company.

Shares of this leading homebuilder inched down 2.3% during yesterday’s trading session.

Inside NVR’s Headlines

The company reported earnings of $130.50 per share, which missed the Zacks Consensus Estimate of $132.08 by 1.2%. The reported figure increased 4.2% from the prior-year quarter’s earnings of $125.26 per share.

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote

Homebuilding revenues of $2.68 billion topped the consensus mark of $2.66 billion by 0.8%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.73 billion, up 6% on a year-over-year basis.

Segment Details of NVR

Homebuilding: The segment’s revenues grew 7% from the year-ago quarter. Settlements in the quarter were up 5% year over year to 5,908 units. Our model predicted settlements to increase 4.5% year over year to 5,858 units. The average selling price (ASP) for the settlements was $453,200, up 1% year over year. Our estimate for the metric was $449,700.

The gross margin contracted 90 basis points year over year to 23.4%, due to higher lot costs and closing cost assistance. Our estimate for the metric was 24.2%.

New orders increased 19% from the prior-year quarter’s level to 5,650 units. The ASP of new orders decreased 1% from the prior-year quarter’s figure to $450,700. Our model predicted the ASP of new orders to increase 1.2% year over year to $461,500. The cancellation rate was 14.5%, up from 13.6% a year ago.

On a unit basis, backlog at the end of Sept. 30, 2024, improved 9% from the prior-year quarter’s figure to 11,339 homes and rose 11% on a dollar basis to $5.32 billion.

The average active communities were 422 in the quarter, down from 431 reported a year ago.

Mortgage Banking: Mortgage banking fees decreased 2.3% year over year to $55.3 million. Mortgage closed loan production totaled $1.66 billion, up 2% year over year. The capture rate was 86% in the third quarter, down from 89% a year ago.

NVR’s Financials

As of Sept. 30, 2024, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.47 billion and $36.7 million, respectively, compared with $3.13 billion and $36.4 million at 2023-end.

During the third quarter, NVR repurchased 42,629 shares for $357.4 million. At September 2024 end, the company had 3,064,790 shares outstanding.