DALLAS - Landsea Homes Corporation (NASDAQ:LSEA), a residential homebuilder, reported its financial results for the first quarter ended March 31, 2024, revealing mixed outcomes.
The company posted adjusted earnings per share (EPS) of $0.06, which fell short of the analyst consensus estimate of $0.07. However, Landsea Homes exceeded revenue expectations with a reported $294 million against the predicted $279.87 million.
Despite the EPS miss, the company's revenue reflected a significant 22% increase compared to the same period last year, primarily driven by a 7% rise in home closings and a 14% hike in the average sales price to $579,000. The company also saw a 23% year-over-year (YoY) increase in net new home orders, reaching 612, with a monthly absorption rate of 3.3 sales per active community.
John Ho, CEO of Landsea Homes, attributed the strong top-line growth to robust home sales and an uptick in average selling prices. "We have experienced solid demand trends so far this spring and look to carry this momentum into the summer and beyond," said Ho. He also noted the company's strategic responses to the recent rise in interest rates, which included interest rate buydowns and other financing incentives to maintain affordability.
For the second quarter of 2024, Landsea Homes anticipates new home deliveries to be in the range of 600 to 650, with delivery average selling prices (ASPs) expected between $525,000 and $530,000. The home sales gross margin is projected to be between 15% and 16%. Looking ahead to the full year, the company forecasts new home deliveries to be in the range of 2,500 to 2,900, with delivery ASPs between $500,000 and $525,000, and a home sales gross margin between 17% and 18%.
The company's balance sheet showed total liquidity of $364.1 million, with $140.0 million in cash and cash equivalents and escrow, and $224.1 million available under its revolving credit facility. Landsea Homes also reported a debt to capital ratio of 46.4% and a net debt to total capital ratio of 35.3%.
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