Workflow
Meritage Homes' Q4 Earnings & Revenues Surpass Estimates
MTHMeritage Homes(MTH) ZACKS·2025-01-30 16:10

Earnings and Revenue Performance - Earnings per share (EPS) of 4.72beattheZacksConsensusEstimateby113.64.72 beat the Zacks Consensus Estimate by 113.6% but declined 12% year over year from 5.38 [4] - Total revenues of 1.62billiondecreased2.31.62 billion decreased 2.3% year over year from 1.66 billion [4] - Total closing revenues of 1.61billiondeclined21.61 billion declined 2% year over year but exceeded the consensus estimate of 1.57 billion by 2.8% [5] - Home closing revenues under the Homebuilding segment fell 3% year over year to 1.595billionduetoloweraveragesalesprices(ASPs)[5]−Landclosingrevenuesincreased491.595 billion due to lower average sales prices (ASPs) [5] - Land closing revenues increased 49% year over year to 17.4 million [5] Operational Metrics - Homes closed increased 2% year over year to 4,044 units, with ASPs declining 5% to 395,000[6]−Totalhomeordersrose14395,000 [6] - Total home orders rose 14% year over year to 3,304 homes, with dollar value increasing 10% to 1.32 billion [7] - Entry-level buyers accounted for 91% of sales orders, up from 88% in the prior-year period [8] - Backlog units decreased 39% year over year to 1,544, with backlog value down 42% to 629.5million[8]−Averageabsorptionpaceimproved8629.5 million [8] - Average absorption pace improved 8% year over year to 3.9 homes per month [7] Margins and Expenses - Home closing gross margin contracted 200 basis points (bps) to 23.2%, driven by higher lot costs and financing incentives [9] - Selling, general, and administrative expenses as a percentage of home closing revenues increased 10 bps to 10.8% [10] - Financial Services segment revenues grew 17% year over year to 8.4 million [10] Full-Year 2024 Highlights - Total revenues for 2024 increased 4.2% year over year to 6.4billion[12]−EPSrose86.4 billion [12] - EPS rose 8% year over year to 21.44 [12] - Homes delivered increased 12% to 15,611, with ASPs declining 6% to 406,000[12]−Grossmarginsimproved10bpsto24.9406,000 [12] - Gross margins improved 10 bps to 24.9% [12] Financial Position - Cash and cash equivalents decreased to 651.6 million from 921.2millionattheendof2023[13]−Totallotsownedorcontrolledincreasedto65,600,including5,500fromtheElliottHomesacquisition[13]−Totaldebttocapitalroseto20.6921.2 million at the end of 2023 [13] - Total lots owned or controlled increased to 65,600, including 5,500 from the Elliott Homes acquisition [13] - Total debt to capital rose to 20.6% from 17.9% at the end of 2023, while net debt to capital increased to 11.7% from 1.9% [13] - Net cash used by operating activities was 227.6 million, compared to 355.6millionprovidedin2023[14]−Thecompanypaid355.6 million provided in 2023 [14] - The company paid 108.6 million in dividends and repurchased 732,255 shares for 125.9million[14]2025Guidance−Thecompanyexpectstoclosebetween16,250and16,750homes,upfrom15,611in2024[15]−Revenueisprojectedtobebetween125.9 million [14] 2025 Guidance - The company expects to close between 16,250 and 16,750 homes, up from 15,611 in 2024 [15] - Revenue is projected to be between 6.6 billion and $6.9 billion, reflecting continued demand for affordable housing [15] Peer Performance - D R Horton reported Q1 fiscal 2025 earnings and revenues beating estimates but declining year over year [16] - D R Horton leveraged mortgage rate buydowns and smaller floor plans to address affordability challenges [17] - KB Home posted strong Q4 2024 results, with revenues and earnings surpassing expectations and increasing year over year [18] - KB Home's strategy focused on faster build times and strong homeownership demand despite mortgage rate pressures [19] - NVR reported Q4 2024 earnings and Homebuilding revenues exceeding estimates, with both metrics increasing year over year [20] - NVR saw strong growth in settlements despite a decline in new orders [21]