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COLUMBUS - On Wednesday, M/I Homes, Inc. (NYSE:MHO) reported third-quarter earnings that fell short of analyst expectations, as both profits and revenue declined amid challenging housing market conditions.
The company’s shares were down 5.92% in pre-market trading following the result.
The homebuilder posted adjusted earnings of $3.92 per diluted share for the quarter ended September 30, missing analyst estimates of $4.36. Revenue came in at $1.13 billion, below the consensus forecast of $1.16 billion and down 1% from $1.14 billion in the same period last year. The quarter’s results included a $7.6 million pre-tax inventory charge.
Despite delivering a third-quarter record 2,296 homes, up 1% YoY, new contracts decreased 6% to 1,908 compared to 2,023 in the prior year period. The company’s cancellation rate rose to 12% from 10% a year earlier.
"Despite the continued challenging housing market conditions and uneven demand environment, we had a solid quarter," said Robert H. Schottenstein, Chief Executive Officer and President. "We produced $140 million of pre-tax income representing 12% of revenue and delivered a third quarter record 2,296 homes."
The company’s backlog decreased significantly, with units down 31% to 2,189 homes and total sales value falling 30% to $1.21 billion compared to $1.73 billion a year ago. However, the average sales price in backlog reached a record $553,000.
M/I Homes maintained a strong financial position with shareholders’ equity reaching a record $3.1 billion, up 11% from a year ago. Book value per share increased to a record high of $120. During the quarter, the company repurchased $50 million of common stock and extended its bank credit facility to 2030 with increased borrowing capacity to $900 million.
The homebuilder operated 233 communities at quarter-end, up from 217 communities a year earlier, positioning the company for potential growth despite current market headwinds.
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