M.D.C. Holdings (MDC) Misses Q4 EPS by 20c, Revenues Beat

M.D.C. Holdings (NYSE: MDC) reported Q4 EPS of $0.95, $0.20 worse than the analyst estimate of $1.15. Revenue for the quarter came in at $858.5 million versus the consensus estimate of $835.14 million.

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "2018 was a banner year for MDC as home sales revenues increased 19%, home sales gross margins expanded 170 basis points, and pretax income rose to its highest level in over a decade. In addition, we ended the year in excellent financial condition, with a homebuilding debt to capital ratio of 39% and enhanced liquidity following the increase of our homebuilding line of credit from $700 million to $1.0 billion in the fourth quarter. Furthermore, we delivered on our goal of 10% active community count growth to start 2019."

Mr. Mizel continued, "The fourth quarter marked a strong end to the year as we made significant year-over-year improvements to our top and bottom line. However, order activity during the quarter was not as robust as it was last year, a sign that buyers are being patient with their purchase decisions. Years of price appreciation coupled with recent uncertainty about mortgage rates have understandably made some buyers cautious and have resulted in a slower sales pace for our industry. Fortunately, we have adjusted our strategy over the past few years to address the rising cost of home ownership by bringing down the price points of our homes. Our more affordable home offerings were well received in 2018, and we anticipate the same will be true in 2019."

Mr Mizel concluded, "We continue to believe that the outlook for our industry remains favorable, with rising wages, continuing job growth and positive consumer sentiment providing a healthy economic backdrop. MDC is in a great position to capitalize on these fundamentals thanks to our more affordable product focus, our strong balance sheet and our seasoned management team. As a result, we are optimistic about our company\'s future as we enter the spring selling season."

For earnings history and earnings-related data on M.D.C. Holdings (MDC) click here.

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