Taylor Morrison Home (TMHC) Tops Q4 EPS by 5c, Revenues Beat

February 10, 2021 7:00 AM EST

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Taylor Morrison Home (NYSE: TMHC) reported Q4 EPS of $0.87, $0.05 better than the analyst estimate of $0.82. Revenue for the quarter came in at $1.6 billion versus the consensus estimate of $1.45 billion.

The Company's fourth quarter included the following results, as compared to the prior-year quarter:

  • Monthly absorptions increased 31 percent to 3.4 net sales orders per community, among the highest levels in its public company history.
  • Total revenue increased six percent to $1.6 billion.
  • GAAP home closings gross margin increased 410 basis points to 18.3 percent.
  • Adjusted home closings gross margin, exclusive of purchase accounting and other charges, increased 110 basis points to 19.0 percent.
  • SG&A as a percentage of home closings revenue declined 40 basis points to 9.6 percent.

"Our fourth quarter results reflect the vibrant housing market and the initial traction we are seeing as a combined organization following our acquisition of William Lyon Homes one year ago," said Sheryl Palmer, Taylor Morrison Chairman and CEO. "We drove 46 percent year-over-year growth in net sales orders, a 110 basis point sequential improvement in our home closings gross margin and ended the year with a company-record backlog of more than 8,400 homes valued at over $4.2 billion."

"Following years of strategic growth into one of the country's leading homebuilders with deep penetration across our markets and a well-balanced product portfolio that serves the needs of today's homebuyers, our top priority in 2021 is demonstrating the financial and operational benefits of our enhanced scale through an unrelenting focus on operational effectiveness and capital efficiency. We are committed to driving improved returns that are reflective of our market depth, efficient homebuilding operations and valuable land portfolio, and expect 2021 to be a pivotal year for our organization."

"After exceeding our deleveraging targets over the last twelve months, we now expect to build on the positive momentum and further reduce our net debt-to-capitalization to the low-30 percent range by the end of 2021. Equipped with strong operating cash flow and $1.3 billion in liquidity, we have the financial flexibility to achieve our capital allocation priorities to enhance the long-term value of our company by investing in our core homebuilding business and growing build-to-rent operations, reducing our net debt and returning excess capital to shareholders via share repurchases," said Dave Cone, Executive Vice President and Chief Financial Officer.

Business Outlook

First Quarter 2021

  • Average active community count is expected to be approximately 360 to 365
  • Home closings are expected to be between 2,850 to 2,950
  • GAAP home closings gross margin is expected to be in the mid-18 percent range
  • Effective tax rate is expected to be approximately 23.0 percent
  • Diluted share count is expected to be approximately 131 million

Full Year 2021

  • Average active community count is expected to be approximately 360 to 365
  • Home closings are expected to be between 14,500 to 15,000
  • GAAP home closings gross margin is expected to be about 19 percent
  • SG&A as a percentage of home closings revenue is expected to be in the mid-9 percent range
  • Effective tax rate is expected to be approximately 23.0 percent
  • Diluted share count is expected to be approximately 130 million
  • Land and development spend is expected to be approximately $2.0 billion

For earnings history and earnings-related data on Taylor Morrison Home (TMHC) click here.



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