In This Article:
A month has gone by since the last earnings report for NVR (NVR). Shares have lost about 0.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NVR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NVR's Q2 Earnings Surpass Expectations, New Orders Increase
NVR, Inc. reported second-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate.
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.
Segment Details
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.
Financials
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 12.09% due to these changes.