Breaking News

Meritage Homes' (MTH) Q2 Earnings Beat Estimates, View Up

By Zacks Investment ResearchStock MarketsJul 24, 2019 11:01PM ET
Meritage Homes' (MTH) Q2 Earnings Beat Estimates, View Up
By Zacks Investment Research   |  Jul 24, 2019 11:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Meritage Homes Corporation (NYSE:MTH) reported second-quarter 2019 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate, buoyed by strong homebuying activity.

Earnings of $1.31 per share topped the consensus mark of $1.03 by 27.2%. However, the reported figure was in line with the year-ago profit level. Lower home closing revenues and increased interest and SG&A expenses were offset by higher gross margin.

Home closing revenues of $863.1 million surpassed the consensus mark of $805 million by 7.2% but decreased 1.1% year over year.

Segment Discussion

Homebuilding/Total Closing Revenues: Revenues from the segment decreased 1.5% from the prior-year quarter to $864.6 million, impacted by 6% reduced ASP, which offset the 5.3% increase in volume. Home closing revenues in the West region were down 14.5% from the year-ago level due to a 9% reduction in ASP and 7% drop in closings. The decrease in the West region was primarily due to softness in California.

Homes closed during the quarter came in at 2,253, up 5.3% year over year. Despite higher closings, revenues declined due to lower ASP that reflects the company’s ongoing strategic shift toward more affordable entry-level and first move-up homes at lower price points. Notably, its entry-level LiVE.NOW. homes represented 52% of second-quarter orders, increasing from 44% a year ago.

Total orders increased 21.6% from the year-ago level to 2,735 homes. The value of net orders also increased 13.7% year over year to $1.04 billion. Quarterly order volume marked a 13-year record high, driven by a 19% improvement in absorption pace and marginal increase in average community count.

However, land closing revenues of $1.6 million were significantly down from $5.1 million a year ago.

Financial Services: The segment’s revenues increased 7.5% from the prior-year level to $4.2 million.


Home closing gross margin improved 10 basis points (bps) to 18.4% from the prior-year figure.

Selling, general and administrative expenses (as a percentage of home closing revenues) of 11% were up 10 bps from the prior-year figure of 10.9%.

Balance Sheet

As of Jun 30, 2019, cash and cash equivalents totaled $407.4 million compared with $311.5 million on Dec 31, 2018. The upside was backed by positive cash flow from operations.

As of Jun 30, 2019, debt-to-capital ratio of the company reduced to 42.1% from 43.2% on Dec 31, 2018. Also, net debt-to-capital ratio decreased to 33.4% from 36.7% on Dec 31.

2019 Guidance

Meritage Homes now expects full-year 2019 home closings in the range of 8,700-9,100 versus 8,200-8,700 projected earlier. The mid-point of the guided range is higher than the year-ago reported figure of 8,531 homes. The company expects total home closing revenues within $3.4-$3.6 billion versus $3.25-3.45 billion expected earlier. In 2018, it reported home closing revenues of $3.47 billion.

The company anticipates home closing gross margin in mid-18% and earnings within $5.20-$5.50 per share compared with $4.65-4.95 expected earlier. In 2018, the company had reported earnings of $5.58 per share.

Zacks Rank

Meritage Homes currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

PulteGroup Inc.’s (NYSE:PHM) second-quarter 2019 earnings and revenues surpassed the respective Zacks Consensus Estimate. Both earnings and revenues, however, decreased 3.4% from the year-ago level.

NVR, Inc. (NYSE:NVR) reported second-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate. Also, the reported figure increased 8.2% from the prior-year quarter. Total revenues (Homebuilding & Mortgage Banking fees combined) were $1.8 billion in the quarter, up 1% year over year on higher deliveries and prices.

Lennar Corporation (NYSE:LEN) reported better-than-expected results in second-quarter fiscal 2019 (ended May 31, 2019), after missing estimates in the preceding quarter. Earnings and revenues increased on a year-over-year basis during the quarter.

This Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>

PulteGroup, Inc. (PHM): Free Stock Analysis Report

Lennar Corporation (LEN): Free Stock Analysis Report

NVR, Inc. (NVR): Free Stock Analysis Report

Meritage Corporation (MTH): Free Stock Analysis Report

Original post

Zacks Investment Research
Meritage Homes' (MTH) Q2 Earnings Beat Estimates, View Up
Meritage Homes' (MTH) Q2 Earnings Beat Estimates, View Up

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email