Declining new homes sales in December didn’t seem to bother NVR, Inc. (NVR) too much as the homebuilder and mortgage banking company on Monday posted fourth quarter results showing profits and sales that surged beyond analyst expectations.
NVR’s homebuilding unit sells and builds homes under the Ryan Homes, NVHomes, Fox Ridge Homes and Heartland Homes trade names, in fourteen states and Washington, D.C.
NVR Q4 Earnings Beat Expectations
For the quarter ended December 31, 2103, Reston, Virginia-based NVR said that consolidated revenue totaled $1.24 billion, up 32 percent from $943.74 million in the year prior quarter. Net income for the quarter was $97.81 million, or $21.15 per share, compared to $60.63 million, or $11.98 per share, in last year’s quarter. That’s a gain of 61 percent in total profits and a 71-percent advance on a per share basis.
Wall Street was expecting earnings per share of on $16.15 on revenue of $1.12 billion.
Homebuilder revenue jumped 32 percent from Q4 2012 to $1.22 billion. New orders were flat at 2,631 units. On the downside, mortgage banking income fell by 19 percent to $7.44 million, due to higher general and administrative costs resulting from increased headcount. Mortgage closed loan production was up 12 percent in the quarter to $721.93 million.
2013 Revenue Up by Almost One Third
The quarter ended with the company having a backlog of homes sold, but not yet settled, of 4,945 units. On a unit level, that’s down by 1 percent from the same time in 2012, but it’s up by 7 percent at a dollar value of $1.85 billion, reflecting a continuing rise in housing costs across the nation.
Gross profit margin for the latest quarter edged down 10 basis points to 18.2 percent, mostly because of the negative impact of a $15.96 million cost related to a warranty accrual for a non-recurring service problem. Not counting that, gross profit margin would have risen to 10.5 percent.
For all of 2013, consolidated revenue was up 32 percent from 2012 to $4.21 billion. Net income was $266.48 million, or $54.81 per share, handily beating 2012’s profits of $180.59 million, or $35.12 per share. Analysts were predicting profits of $49.83 per share or sales of $4.05 billion.
New orders grew by 8 percent over 2012 to 11,800 units, versus 10,954 units. Home settlements were up 20 percent at 11,834 units and homebuilding revenue rose 32 percent to $4.13 billion.
Shares of NVR have been galloping ahead since hitting a 52-week low of $830 in September, climbing to around $1,030 per share as 2013 came to a close. The stock is up more than 6 percent in Monday trading at $1,073.50 and is nearing an all-time high that currently sits at $1,100.