M.D.C. Holdings (MDC) Tops Q4 EPS by 15c, Revenues Miss

M.D.C. Holdings (NYSE: MDC) reported Q4 EPS of $1.42, $0.15 better than the analyst estimate of $1.27. Revenue for the quarter came in at $1.07 billion versus the consensus estimate of $1.1 billion.

Larry A. Mizel, MDC\'s Chairman and Chief Executive Officer, stated, "MDC finished the year on a strong note, generating fully diluted earnings per share of $1.42 in the fourth quarter, a 61% increase as compared to last year. We also achieved year-over-year improvements in our homebuilding gross margin and SG&A leverage, resulting in homebuilding operating margin expansion of 150 basis points. The sales environment continues to be favorable, as evidenced by the 49% growth in unit orders for the quarter. These demand trends have carried into the new year, giving our business strong momentum as we head into the spring selling season."

Mr. Mizel continued, "For the full year 2019, we posted year-over-year improvements to both revenue and profitability, which resulted in fully diluted earnings per share of $3.72. This marks our fifth consecutive year of net income growth, and we are well positioned to continue that trend in 2020 thanks to a 29% increase in homes in backlog to start the year. We also ended the year in a strong financial position with a year-over-year decrease in our debt to capital ratio and a maturity schedule that was further enhanced earlier this month by the issuance of $300 million of 3.850% senior notes due 2030."

Mr. Mizel concluded, "As we enter 2020, we will continue to focus on the more affordable segments of the market due to the ongoing lack of supply and broad-based demand we have witnessed. We believe this favorable supply-demand environment will remain in place for some time given the demographic shifts occurring in this country. These factors, coupled with our solid market positioning and growing backlog, provided us with the confidence to increase our cash dividend by 10% just a few days ago."

2020 Outlook – Selected Information2

• Backlog dollar value at December 31, 2019 up 22% year-over-year to $1.75 billion
• Home deliveries for the 2020 first quarter between 1,550 and 1,650
  • Average selling price for 2020 first quarter unit deliveries between $450,000 and $460,000
  • Gross margin from home sales for the 2020 first quarter between 18.8% and 19.2% (excluding impairments and warranty adjustments)
• Active subdivision count at December 31, 2019 of 185, up 11% year-over-year
• Lots controlled of 27,386 at December 31, 2019, up 18% year-over-year
• Declared 10% increase in quarterly dividend to $0.33 ($1.32 annualized) in January 2020

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

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