NVR Inc., Reston, Va. (NYSE:NVR) opened builder earnings season Thursday morning with a better-than-expected performance despite the expiration of government homebuying incentives. Net income for NVR's third quarter ended September 30 was $43.9 million, or $7.31 per diluted share, down 39% and 37%, respectively, from last year. Still, the results beat the consensus analyst estimate of $6.52 per share.
Revenues for the quarter were down 17% to $676.2 million and home-building revenues were down 16% to $661.9 million as closings fell 20% to 2,127 units. New orders fell 5% to 2,151 units as the cancellation rate rose to 18% from 14% in last year's quarter and 12% in this year's second quarter.Both the average settlement price and the average new order price were up, the former by 4.9% to $311,100 and the latter by 3% to $306,300.
Backlog of homes sold but not settled at quarter's end was down 7% to 3,790 units with a value of $1.18 billion, down 2%. The average backlog price was up 5.3% to $312,500 for the first nine months of 2010 compared to the same period last year.
Average community count rose to 374 from 354 at the end of last year's quarter.
Pretax income was down 41% to $58.4 million. Gross margin declined to 18.3% in the quarter from 19.7% for the 2009 third quarter. SG&A rose 15% to$65.5 million.
In NVR's mortgage unit, closed loan production fell 18% from last year's quarter to $497.4 million. Operating income for the mortgage banking operations decreased 56% to $6.5 million.
The company ended the quarter with $1.053 billion in cash and $25 million in marketable securities. It listed zero under senior notes on its home-building balance sheet, down from $133.3 million at yearend 2009.
Shares of NVR opened up a bit more than half a percent Thursday at $639.00.