Meritage Homes (NYSE: MTH) reported Q4 EPS of $1.19, $0.16 better than the analyst estimate of $1.03. Revenue for the quarter came in at $668.3 million versus the consensus estimate of $710.56 million.

• Fourth quarter orders increased 12% and the total value of homes ordered increased 18%, after a 5% increase in average sales prices, which reached $386,000 in the fourth quarter of 2014 compared to $367,000 in 2013. Texas’s fourth quarter order value was flat compared to the prior year despite an 8% decline in orders, as it was offset by a 9% increase in its average sales price. The decline in Texas orders was due to 13% fewer average actively selling communities compared to prior year, partially offset by an increase in average sales per community.
• Total active community count at year-end increased 22% in 2014 over 2013, primarily due to the acquisition of Legendary Communities, which operates at a structurally lower sales pace than Meritage’s other markets. As a result, average orders per community declined to 5.6 in the fourth quarter of 2014 from 6.2 in the fourth quarter of 2013, dampening the effect of the increase in community count on total order growth.
• Cancellation rates increased slightly to 17% in the fourth quarter of 2014, compared to 15% in the fourth quarter of 2013, but remained below historical rates for the Company.
• Home closing gross profit increased 13% over the prior year due to higher home closing revenue. Increased revenue was partially offset by a decline in home closing gross margins in the West and an approximate 48 bps negative impact due to purchase accounting adjustments on closings of Legendary Communities.
• Fourth quarter 2014 home closing margin was 20.3% compared to 23.2% in the fourth quarter of 2013.
• Commissions and other selling expenses increased by 40 basis points from the prior year to 7.2% of home closing revenue in the fourth quarter of 2014, compared to 6.8% of home closing revenue in the fourth quarter of 2013. Marketing and other sales overhead costs related to opening new communities and new divisions inflated the percentage of these costs relative to their closing revenues.
• General and administrative expenses for the fourth quarter of 2014 decreased by 40 basis points to 4.2% of total closing revenue in 2014, compared to 4.6% of total closing revenue in 2013.
• Interest expense decreased 70% to $0.6 million or 0.1% of total closing revenue in the fourth quarter of 2014, compared to $2.0 million or 0.4% of total closing revenue in the fourth quarter of 2013, as we capitalized nearly all interest incurred to assets under development.

For earnings history and earnings-related data on Meritage Homes (MTH) click here.