M.D.C. Holdings, Inc. (NYSE: MDC), parent of Richmond American Homes, on Tuesday reported a net profit of $26.4 million, or $0.54 per share, for the third quarter ended Sept. 30, up 78% from $14.8 million or $0.30 per share for the third quarter of last year. Analysts were expected a gain of $0.62 per share.
Home-sale revenues rose 27% to $575.7 million, the average sales price was up 6% to $445,300 and homes delivered jumped 20% to 1,293. The company attributed the gain in sales price to a mix shift to higher-priced submarkets and price increases implemented in the prior year.
Dollar value of net new orders was up 17% to $570.3 million from $489.0 million as new orders rose 17% to 1,296. The average sales price of new orders was flat with last year's quarter, which the company said was due to a shift in mix to lower price communities, in part related to the introduction of our more affordable product earlier this year.
Ending backlog units were up 33% to 3,448, with the dollar value of backlog units up 37% to $1.61 billion from $1.18 billion. The rise in backlog was due to an increase in net new order activity over the last twelve months for most markets, a higher percentage of backlog coming from build-to-order sales, which are generally in backlog for a longer period of time and limited subcontractor availability, which has extended cycle times in most larger markets.
Selling, general and administrative expenses as a percentage of home sale revenues improved 180 basis points from 12.6% to 10.8%.
"Our order results included an increased contribution from our new, more affordable collection of home plans, which are still in the early stages of rollout," said Larry A. Mizel, MDC chairman and CEO. "With a simpler design, these new plans should ultimately have a positive impact on our overall construction cycle times, which remain a key focus area for the company as we close out the year."