M.D.C. Holdings (MDC) Tops Q2 EPS by 48c, Revenues Beat

M.D.C. Holdings (NYSE: MDC) reported Q2 EPS of $1.31, $0.48 better than the analyst estimate of $0.83. Revenue for the quarter came in at $886.8 million versus the consensus estimate of $808.09 million.

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "MDC experienced a remarkable turnaround in the second quarter of 2020, as order activity rebounded sharply from the initial weeks of the pandemic. Unit net orders for the quarter rose 5% year-over-year and increased 53% for the month of June, with our sales efforts gaining momentum as the quarter progressed. We also generated strong revenue growth and margin expansion in the quarter, resulting in net income of $84.4 million, or $1.31 per diluted share."

Mr. Mizel continued, "Our results this quarter reflect the favorable industry dynamics in place today, including a low interest rate environment, a lack of available supply and a highly motivated buyer. They also reflect our continued shift in focus to the more affordable segments of the market and the benefits of our build-to-order strategy, which caters to the wants and needs of a large segment of the buying population. We believe that providing homebuyers with flexibility and choice at an affordable price is a winning strategy for our company. Given the favorable market conditions we are experiencing, we now believe that we may achieve as many as 8,000 home deliveries for the 2020 full year, which would be a 15% increase from the prior year."

Mr. Mizel concluded, "While there are still many uncertainties regarding the pandemic's impact on our industry and the broader economy, MDC is well positioned for the future given our seasoned leadership team, our strategic focus and our balance sheet strength. I want to thank all of our team members who have done such an excellent job adapting to this new reality and who have been vigilant in providing a safe environment for our employees, suppliers and customers."

2020 Outlook

• Home deliveries for the 2020 third quarter between 1,900 and 2,100
• Average selling price for 2020 third quarter unit deliveries exceeding $460,000
• Gross margin from home sales for the 2020 third quarter of approximately 20% (excluding impairments and warranty adjustments)
• Full year 2020 home deliveries between 7,700 and 8,000
• Active subdivision count at June 30, 2020 of 192, up 3% year-over-year
• Lots controlled of 25,027 at June 30, 2020, up 6% year-over-year
• Quarterly cash dividend of thirty-three cents ($0.33) per share declared on July 27, 2020, up 10% from prior year

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

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