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NVR's Q1 Earnings Top Estimates, Revenues Fall Y/Y, Stock Down

NVR, Inc. NVR first-quarter 2023 earnings surpassed the Zacks Consensus Estimate. Earnings and revenues declined on a year-over-year basis. Following the results, the company’s shares declined 3.6% during the trading session on Apr 25.

Inside the Numbers

The company reported earnings of $99.89 per share, which topped the consensus mark of $96.46 by 3.6%. The reported figure, however, declined 14.3% from the prior-year figure of $116.56 per share.

Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.18 billion for the reported quarter, reflecting a decline of 8% on a year-over-year basis.

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. Price, Consensus and EPS Surprise

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

Segment Details

Homebuilding: Revenues in the segment totaled $2.13 billion, down 8% from the year-ago level. The metric also missed the consensus estimate of $2.36 billion by 9.7%. Settlements in the quarter declined 11% year over year to 4,639 units. The average selling price, or ASP, was $459,400, reflecting an increase of 4% year over year.

Gross margin decreased 390 basis points to 24.6%, impacted by lower ASP of new orders and high cancellation rate.

New orders were down 1% from the prior year to 5,888 units. The average sales price of new orders fell 5% from the prior-year quarter to $441,200. The cancellation rate was 14% for the quarter, reflecting an increase from the year-ago period. Average active communities totaled 413, up from 404 reported for first-quarter 2022.

Quarter-end backlog on a unit basis decreased 23% to 10,411 units from the prior-year figure and 23% on a dollar basis to $4.79 billion.

Mortgage Banking: Mortgage banking fees decreased 32.1% year over year to $46.9 million. Mortgage closed loan production totaled $1.24 billion, down 17% year over year. The capture rate was 83% for the first quarter, down from 86% a year ago.

Financials

At first-quarter 2023-end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.8 billion and $14.3 million compared with $2.5 billion and $19.4 million, respectively, at 2022-end.

Zacks Rank

NVR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Few Recent Construction Releases

KB Home KBH reported better-than-expected first-quarter fiscal 2023 (ended Feb 28, 2023) results, defying the challenging housing market conditions. Its earnings and revenues beat the Zacks Consensus Estimate.

KBH’s quarterly revenues were at the high end of its guided range. Both operating and gross margins performed better than expected. KBH’s book value per share grew to $44.80, up 27% from a year ago.

RPM International Inc. RPM reported third-quarter fiscal 2023 (ended Feb 28, 2023) results, wherein its earnings and sales beat the Zacks Consensus Estimate. Although sales increased, earnings declined year over year.

During the quarter, RPM’s net sales benefited from reshoring and infrastructure spending.

Acuity Brands, Inc. AYI reported mixed results for second-quarter fiscal 2023 (ended Feb 28, 2023), wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus mark for the 11th consecutive quarter. Revenues missed the same for two quarters in a row, following six straight quarters of beat.

On a year-over-year basis, AYI’s earnings and revenues rose as both the lighting and spaces businesses’ sales grew. Adjusted operating profit and adjusted earnings per share increased as well.

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