Meritage Homes Q4 2019 Earnings Report
Key Takeaways
Meritage Homes reported a strong fourth quarter in 2019, driven by a strategic shift to entry-level homes. Total orders increased by 27%, and diluted earnings per share increased by 39%. The company also improved its home closing gross margin and strengthened its balance sheet.
Total orders increased 27% year-over-year, driven by a 37% increase in absorptions.
Home closing revenue was up 11% due to a 13% increase in home closing volume.
Home closing gross margin improved 80 bps to 19.8%.
Net earnings increased 37% to $103.6 million, or $2.65 per diluted share.
Meritage Homes
Meritage Homes
Meritage Homes Revenue by Geographic Location
Forward Guidance
For the full year 2020, the company is projecting 9,700-10,200 total home closings and ASP’s between $360-370,000, with home closing gross margin in the mid-19’s percent and a tax rate of approximately 22%.
Positive Outlook
- Economic drivers remain positive for housing demand.
- Company's ability to deliver homes that provide great value at lower price points.
- Secured more than 18,000 new lots in 2019, expanding pipeline for community count growth.
- Positioned to deliver strong volume growth as communities are opened and begin selling.
- Believe we can grow earnings faster than our top-line growth in 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income