Editor's Note: An earlier version of this story erroneously reported a $42.7 million land deposit impairment charge in the third quarter of 2009. The land charge was taken in the third quarter of 2008. There were no impairments in the 2009 quarter.
NVR, Inc. (NYSE:NVR) on Wednesday before market open reported net income for the third quarter ended September 30 of $72.1 million ($11.59 per diluted share), up 97% and 89%, respectively, from last year's quarter. It raised profits despite a 13% drop in consolidated revenues to $814 million.
Home building revenues fell 15% to $792.5 million as settlements decreased 3% to 2,671 units and the average settlement price dropped 12.1% to $296,100.
New orders, however, jumped 13% to 2,255 units, compared to 2,002 units in the third quarter of 2008. The average new order price fell marginally from $302,900 in the comparable period last year to $297,100 in this quarter. The cancellation rate was 14% compared to 24% in the third quarter of 2008 and 14% in the second quarter of 2009.
Backlog of homes sold but not settled at the end of the 2009 quarter decreased 11% to 4,081 units with total value down 19% to $1.2 billion. The average backlog price was down 9.4% to $296,600.
Community count was down to 354 from 426 at the same time last year, and lots controlled was down to 43,700 from 58,300 last Sept. 30.
Gross profit margins increased to 19.7% in the quarter compared to 13.2% for the same period in 2008. Pre-tax home building income totaled $98.6 million in the 2009 third quarter, an increase of 74% compared to the third quarter of 2008. SG&A was down 15.2% to $56.7 million.
NVR ended the quarter with cash and cash equivalents of $1.11 billion, down from $1.4 billion at Dec. 31, 2008.
Shares of NVR shot up at market open and stayed there throughout the session, closing up 5.2% at $704.36 on nearly four times the prior day's volume.