A 22% increase in community count drove Taylor Morrison to a 14% increase in the first quarter. But, like much of the rest of the sector, the company’s gross margins fell—dropping 150 basis points sequentially and 380 basis points year-over-year to 17.9%.
Taylor Morrison’s net income increased 134% year-over-year to $96 million and its total revenue increased 8% to $509 million for the quarter. It fared best in the West, with orders rising 16%. In the East, the builder posted 13% growth. Its $446,000 average price per order was a 7% increase.
"We are continuing to increase our share of the new home market, growing both organically and by acquisition," said Taylor Morrison President and CEO Sheryl Palmer in a press release. "Our recently strengthened balance sheet has allowed us to begin our expansion in the U.S. With the acquisition of JEH Homes, a regional homebuilder in Atlanta, we have purchased or controlled over 2,000 home sites.”
But JEH probably won’t be the company’s last move. “Looking ahead to the rest of 2015, we intend to continue executing on our four-pillar strategy while conscientiously evaluating opportunities to expand into other high-growth markets in order to drive the best long-term returns for our shareholders,” Palmer said.
In the second quarter, Taylor Morrison expects average community count to increase by 10 sequentially, home closings of 1,375-1,475 and adjusted gross margins consistent with the first quarter.
J.P. Morgan’s Michael Rehaut expects Taylor Morrison to have “solid earnings growth over the next two years, for which we believe strong visibility, exists given the company’s attractive land inventory position.”