TRI Pointe beat analysts’ expectations in the second quarter, posting earnings per share of $0.34 beating the consensus estimate of $0.25.

TRI Pointe’s net income available to common shareholders jumped from $24.2 million to $54.9 million. The builder said this improvement was driven by an increase of $53.2 million in land sales gross margin and an $18.6 million increase in home building gross margin due to higher home sales revenue, which jumped from $117.6 million to $427.2 million year-over-year. The company said the increase was attributable to a 27% increase in new home deliveries, to 798, and a 9% increase in its average sales price of homes delivered, to $535,000.

“The increase in new home deliveries and the average sales price was primarily attributable to the addition of legacy TRI Pointe, which delivered 174 homes with an average sales price of $750,000 for the quarter ended June 30, 2015, with no comparable amounts in the prior year period,"

TRI Pointe’s gross margin decreased to 20.0% compared to 21.6% to the second quarter in 2014 but increased sequentially from 19.9% during the first quarter of 2015. TRI Pointe attributed falling margins to increases in land, labor, and material costs outpacing home price appreciation—an often repeated refrain from builders this year. It added that excluding interest and impairments and lot option abandonments in cost of home sales, adjusted home building gross margin percentage was 22.0% versus 23.3% for the second quarter of 2014.

“I am extremely pleased with our company’s execution this quarter,” commented Chief Executive Officer Doug Bauer. “TRI Pointe Group continued to sell homes at a healthy pace, with an absorption rate of 3.5 homes per community per month, compared to a rate of 2.6 homes per community per month in the same period in 2014. We also delivered on our previously stated guidance for backlog conversion and home building gross margins. In addition, we closed the Pacific Highlands Ranch commercial site land sale which generated revenue of $53.0 million and $49.6 million of gross margin. These achievements resulted in a 68% year-over-year increase to earnings per share, and reflect our ongoing commitment to unlocking shareholder value through our traditional home building operations and strategic land sales.”

Here are some other highlights:

  • New home orders increased to 1,238 compared to 763, an increase of 62%
  • Active selling communities averaged 119.5 compared to 97.5
  • New home orders per average selling community were 10.4 orders (3.5 monthly) compared to 7.8 orders (2.6 monthly), an increase of 33%
  • Cancellation rate was consistent at 16%
  • Backlog units of 1,998 homes with a dollar value increase of 79%, to $1.2 billion
  • Average sales price in backlog increased 7% to $601,000
  • Land and lot sales gross margin percentage of 82.9%
  • SG&A expense as a percentage of homes sales revenue improved to 12.6% compared to 13.6%