Denver-based M.D.C. Holdings announced its 2015 full-year and fourth-quarter earnings on Wednesday and among the highlights were:
- Net income of $22.6 million, or $0.46 per share vs. $14.6 million or $0.30 per share
- Pretax income of $32.6 million vs. $23.9 million
- Home sale revenues of $554.4 million, up 12% from $493.1 million
- Gross margin from home sales down 20 basis points to 16.1% vs. 16.3%
- Excluding inventory impairments*, gross margin from home sales increased 60 basis points year-over-year
- Ending backlog dollar value of $1.05 billion, up 59%
- Ending backlog units of 2,332, up 54%
- Dollar value of net new orders of $450.5 million, up 26%
- Net new orders of 1,020, up 15%
Larry A. Mizel, MDC's Chairman and Chief Executive Officer, was pleased with the results. "Throughout the year, the home building industry continued to be positively impacted by encouraging macroeconomic drivers such as increasing personal income levels, high employment levels and increasing consumer confidence. As a result of these factors, strong execution by our management team, and a renewed focus on 'build to order homes', we experienced positive results by many measures for the 2015 fourth quarter, including a year-over-year increase in our average selling price of homes delivered and a 60 basis point improvement in our pre-impairment gross margin percentage, which helped us to achieve $22.6 million of net income for the quarter. Furthermore, our 2015 fourth quarter net orders improved by 15% year-over-year, driven by our highest fourth quarter absorption pace in ten years."
“We expect a roughly neutral reaction by the stock today, as while reported 4Q EPS was modestly below our estimate and the Street, at the same time, orders were solidly above our estimate and, we believe, investor expectations, while gross margins were in-line with our estimate,” wrote J.P. Morgan's Michael Rehaut.