Why Is Meritage (MTH) Up 6.6% Since Last Earnings Report?

Core Viewpoint - Meritage Homes reported third-quarter 2024 results with earnings and total closing revenues exceeding estimates but showing a year-over-year decline, marking the seventh consecutive quarter of such performance [2][3]. Earnings & Revenue Discussion - Earnings per share (EPS) was $5.34, surpassing the Zacks Consensus Estimate by 5.7%, but down 11% from $5.98 in the same quarter last year [4]. - Total revenues reached $1.6 billion, a decrease of 1.4% from $1.62 billion year-over-year [4]. Segment Discussion - Total closing revenues were $1.588 billion, down 2% from the prior year but exceeding the consensus estimate of $1.57 billion by 0.7% [5]. - Home closing revenues under the Homebuilding segment were $1.586 billion, also down 2% year-over-year due to a lower average sales price (ASP) [5]. - The company closed 3,942 homes, an 8% increase from the previous year, while the ASP declined 9% to $402,000 [6]. Orders and Backlog - Total home orders increased by 1% year-over-year to 3,512 homes, but the dollar value of home orders decreased by 5% to $1.43 billion [7]. - The backlog at quarter-end totaled 2,284 units, down 37% year-over-year, with a backlog value decrease of 40% to $931.7 million [8]. Margins and Expenses - Adjusted home closing gross margin contracted by 190 basis points to 24.8%, influenced by increased lot costs and financing incentives [9]. - Selling, general and administrative expenses improved to 9.9% of home closing revenues, a 20 basis point improvement from the prior year [10]. Financial Services - Revenues from the Financial Services segment rose 32% year-over-year to $8.1 million [11]. Balance Sheet - Cash and cash equivalents at the end of Q3 totaled $831.6 million, down from $921.2 million at the end of 2023 [13]. - The company owned or controlled approximately 74,800 lots, an increase from about 60,700 lots a year ago [13]. Q4 2024 Guidance - Meritage Homes anticipates 3,750-3,950 closings for the year, generating revenues between $1.5 billion and $1.59 billion, down from $1.64 billion reported last year [15]. - Expected home closing gross margin is projected to be in the range of 22.5-23.5%, with EPS anticipated between $4.10 and $4.60 [16]. Industry Performance - Meritage is part of the Zacks Building Products - Home Builders industry, where PulteGroup reported revenues of $4.48 billion, reflecting an 11.8% year-over-year increase [20].