UPDATE: M.D.C. Holdings Q4 Profit Misses Estimates

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M.D.C. Holdings Inc.
MDC
reported weaker-than-expected earnings for the fourth quarter. The Denver, Colorado-based company posted a quarterly profit of $14.6 million, or $0.30 per share, compared to $30.7 million, or $$0.62 per share, in the year-ago period. Excluding debt extinguishment charge, the company earned $0.41 per share. Its home sale revenue rose 7% to $493.1 million. However, analysts were expecting earnings of $0.45 per share on revenue of $490.6 million. Average sales price rose 8% to $28,800 per home, while gross margin from home sales shrank to 16.3% from 17.4%. The dollar value of net new orders in the quarter climbed 25% y/y to $356.4 million. At the end of the fourth quarter, backlog value rose 31% y/y to $663.2 million. For the year, M.D.C. Holdings posted a profit of $63.1 million, on revenue of $1.69 billion. Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "We are pleased to announce a successful 2014 fourth quarter, capping a third consecutive year of profitability for our Company. Although we have made significant progress with our business since the end of the downturn, in 2014 the homebuilding industry experienced weaker demand, following a brief surge in sales velocity and home prices during the first half of 2013. This environment led us to increase our use of incentives during 2014 to stimulate demand for new homes in certain markets. Combined with rising construction and land costs, the increased incentives placed pressure on our homebuilding gross margins for both the fourth quarter and full year, although we have been able to offset some of the gross margin pressure by keeping our overhead low." M.D.C. Holdings shares rose 0.12% to close at $25.02 yesterday.
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Posted In: EarningsNewsprofit
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