In a quarter when other public builders are losing millions, NVR reported net income of $43.5 million, or $7.42 per diluted share, for the first quarter of 2008. Compared to last year, though, those figures represent a 49 percent drop in net income and a 43 percent decline in earnings per diluted share.
Overall, NVR generated $870 million in home building revenue, a reduction of 19 percent versus 2007. New orders, settlements, and average settlement price also fell at NVR, a top 10 builder based in McLean, Va. NVR accepted 2,731 new orders, which is 30 percent fewer than last year. But closings only dropped 9 percent, with 2,465 settlements during the quarter. The average price for these closed homes slid 11 percent, to $352,600.
NVR’s stronghold market of Virginia, Maryland, Delaware, and West Virginia seems to be giving the company some trouble. “The average new order price declined in all regions, but was primarily due to an 18 percent decline in the Mid-Atlantic region,” the company said in its earnings release. (The average new order price tumbled 14 percent year-over-year, landing at $320,000.)
Cancellation rates in the metro Washington, D.C., have also been up and down for NVR, with a 30 percent cancellation rate in 2008’s first quarter compared to 22 percent year-over-year. However, that 30 percent statistic qualifies as a dramatic improvement over the last quarter of 2007, when NVR’s cancellation rate in the capital-area metro hit 46 percent. NVR’s company-wide cancellation rate was 22 percent this quarter.
For more information, visit www.nvrinc.com.
Alison Rice is a contributing editor to BUILDER Online.