SoFi shares rise as record revenue, member growth drive strong Q3 results
Investing.com -- Meritage Homes Corporation (NYSE:MTH) shares tumbled 7.8% in after-hours trading Tuesday after the homebuilder reported third-quarter results that fell short of analyst expectations and provided weaker-than-anticipated guidance for the fourth quarter.
The Arizona-based company reported adjusted earnings per share of $1.55 for the third quarter, missing analyst estimates of $1.63. Revenue came in at $1.4 billion, below the consensus estimate of $1.48 billion and down 12% YoY. Home closing volume decreased 7% to 3,685 homes compared to the same period last year, while the average sales price on closings declined 5% to $380,000, primarily due to increased incentives.
The company’s outlook for the fourth quarter also disappointed investors, with Meritage projecting earnings per share between $1.51 and $1.70, below analyst expectations of $1.88. Revenue guidance of $1.46-1.54 billion also fell short of the $1.627 billion consensus estimate.
"Meritage successfully navigated a challenging third quarter, exceeding 2024 sales volumes and ending the quarter with our highest ever community count of 334, which was a 20% increase year-over-year," said Steven J. Hilton, executive chairman of Meritage Homes.
Despite the challenges, Meritage reported some positive metrics, including a 4% increase in home orders to 3,636 units compared to the third quarter of 2024. The company also maintained a strong financial position with $729 million in cash and a net debt-to-capital ratio of 17.2%.
Phillippe Lord, chief executive officer, noted: "We pared back our spend on land acquisition and development this quarter to $528 million and were able to redeploy some of the excess cash, returning $85 million capital to shareholders through cash dividends and share repurchases during the third quarter."
Home closing gross margin declined significantly to 19.1%, down 570 basis points from 24.8% in the prior year, reflecting increased incentives, inventory-related impairment charges, higher lot costs, and reduced leverage of fixed costs on lower home closing revenue.
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