M.D.C. Holdings (MDC) Tops Q1 EPS by 45c, Revenues Miss

M.D.C. Holdings (NYSE: MDC) reported Q1 EPS of $2.19, $0.45 better than the analyst estimate of $1.74. Revenue for the quarter came in at $1.18 billion versus the consensus estimate of $1.22 billion.

2020 Fourth Quarter Highlights and Comparisons to 2019 Fourth Quarter

• Home sale revenues increased 10% to $1.18 billion from $1.07 billion

• Unit deliveries up 7% to 2,564

• Average selling price of deliveries up 2% to $461,000

• Gross margin from home sales increased 350 basis points to 22.0% from 18.5%

• Selling, general and administrative expenses as a percentage of home sale revenues ("SG&A rate") of 10.0% vs. 9.8%

• Homebuilding pretax income increased 52% to $142.3 million from $93.4 million

• Financial services pretax income increased 54% to $29.0 million from $18.8 million

• Net income of $147.5 million, or $2.19 per diluted share, up 59% from $92.6 million or $1.42 per diluted share

• Effective tax rate of 13.9% vs. 17.5%

• Dollar value of net new orders increased 92% to $1.32 billion from $684.9 million

• Unit net orders increased 72% to 2,708

• Average selling price of net orders up 12%

Larry A. Mizel, MDC's Executive Chairman, stated, "MDC delivered another quarter of significant order growth and strong profitability in the fourth quarter of 2020. The dollar value of our net orders for the quarter increased 92% year-over-year on a 67% improvement in sales pace, as we continued to see broad-based strength in demand from both a geographic and a product standpoint. Net income rose 59% to $147.5 million, based on the significant growth of both our homebuilding and our financial services operations."

Mr. Mizel continued, "The new home industry continues to benefit from a number of tailwinds, including limited existing home inventory, low mortgage rates, pent-up demand resulting from millennials aging into their prime home-buying years and an increased emphasis on single family home ownership brought about by the pandemic. The outlook for each of these drivers appears to be favorable to start 2021, giving us optimism for our industry and our Company. Given this positive outlook, we have taken steps to fortify our financial position, including the expansion of our homebuilding line of credit to $1.2 billion and the recent issuance of $350 million of senior notes at a record low rate of 2.5%. With a positive industry backdrop, a sizable backlog and a strong balance sheet, MDC is well positioned to build on our success from 2020."

David D. Mandarich, MDC's President and Chief Executive Officer, stated, "2020 was an outstanding year for our company as we successfully navigated the challenges brought about by the pandemic and delivered strong returns for our shareholders. Our focus on more-affordable product and our build-to-order operating model proved to be ideally suited for these turbulent times and allowed us to post significant improvements to nearly every relevant operating metric for the year. As we head into 2021, we remain excited about the opportunities available to our Company, including our recent entry into the Boise market. With a proven business model, a seasoned leadership team and an established track record of success, MDC remains well positioned to take advantage of the favorable housing demand we see today."

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

You May Also Be Interested In

• Nanometrics (NANO) Issues Business Update, Reports FY23 Results
• First Internet Bancorp (INBK) Tops Q1 EPS by 5c
• Ball Corporation (BALL) Raises Dividend, Enters 40M Share Buyback, Announces Management Changes