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Mar 31, 2021
Meritage Homes Q1 2021 Earnings Report
Reported an 88% increase in diluted EPS, 470 bps increase in home closing gross margin and 25% increase in closings over prior year.
Key Takeaways
Meritage Homes reported strong first-quarter results with significant growth in diluted EPS, home closing gross margin, and closings. The company's strategy centered on affordable entry-level and first move-up homes drove the highest first quarter of orders and closings in the company's history.
Total orders increased by 11% year-over-year, driven by a 35% increase in absorption pace.
Home closing revenue increased by 21% year-over-year to $1.1 billion.
Home closing gross margin improved by 470 bps to 24.7%.
Net earnings increased by 85% year-over-year to $131.8 million, with diluted EPS up 88% to $3.44.
Meritage Homes
Meritage Homes
Meritage Homes Revenue by Geographic Location
Revenue by Geographic Location
West Region Revenue
CapyFin.comCentral Region Revenue
CapyFin.comEast Region Revenue
CapyFin.com Forward Guidance
Based on robust selling conditions and confidence in our ability to deliver our backlog, we are projecting 11,700-12,700 annual home closings and approximately $4.55-4.85 billion in total home closing revenue for 2021. In addition, we anticipate home closing gross margin of approximately 25.0% and an effective tax rate of about 23.0%, and expect to realize diluted EPS in the range of $13.75-14.75.
Positive Outlook
- Projecting 11,700-12,700 annual home closings.
- Anticipating approximately $4.55-4.85 billion in total home closing revenue for 2021.
- Expecting home closing gross margin of approximately 25.0%.
- Expecting an effective tax rate of about 23.0%.
- Projecting diluted EPS in the range of $13.75-14.75.
Challenges Ahead
- Guidance is subject to risks and uncertainties in the housing market.
- Potential changes in interest rates and mortgage availability could impact results.
- Inflation in material costs could affect profitability.
- The ability of potential buyers to sell their existing homes may influence closings.
- COVID-19 related disruptions could impact business operations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income