NVR, Inc., Reston Va. (NYSE: NVR) on Friday before market open reported net income for its second quarter ended June 30, 2017 of $147,877,000, or $35.19 per diluted share, up 61% and 60%, respectively, compared to the 2016 second quarter net income of $91,676,000, or $22.01 per diluted share. Shares of NVR jumped nearly 3.5%, or $83.70, to $2,530.99 at market open.
Consolidated revenues for the second quarter of 2017 totaled $1,544,492,000, an 11% increase from $1,388,183,000 in the second quarter of 2016.
New orders in the second quarter of 2017 increased 8% to 4,678 units, when compared to 4,324 units in the second quarter of 2016. The average sales price of new orders in the second quarter of 2017 was $377,000, a decrease of 2% when compared with the second quarter of 2016. NVR attributed the decrease to a shift in new orders from higher priced markets to lower priced markets.
Settlements increased in the second quarter of 2017 to 3,917 units, 9% higher than the second quarter of 2016. The company's backlog of homes sold but not settled as of June 30, 2017 increased on a unit basis by 9% to 8,813 units and increased on a dollar basis by 10% to $3,444,964,000when compared to June 30, 2016.
Home-building revenues in the second quarter of 2017 totaled $1,512,714,000, 11% higher than the year-earlier period. Gross profit margin in the second quarter of 2017 increased to 19.5%, compared to 17.3% in the second quarter of 2016. NVR said gross profit margin was boosted by modest improvement in pricing combined with moderating construction costs. Income before tax from the home-building segment totaled $191,337,000 in the second quarter of 2017, an increase of 45% when compared to the second quarter of 2016.
Mortgage closed loan production in the second quarter of 2017 totaled $1,041,613,000, an increase of 11% when compared to the second quarter of 2016. Income before tax from the mortgage banking segment for the second quarter of 2017 was $17,631,000, compared to $13,192,000 for the second quarter of 2016.
The company also booked a gain from a reduction in the effective tax rate for the three and six months ended June 30, 2017 to 29.2% and 26.5%, respectively, compared to 36.7% for both the three and six months ended June 30, 2016. The reduction in the effective tax rate was primarily due to the company's January 1, 2017 adoption of Accounting Standard Update 2016-09, which resulted in an income tax benefit of $16,464,000 and $36,364,000 related to excess tax benefits from stock option exercises during the three and six months ended June 30, 2017, respectively.
