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Dec 31, 2020
Meritage Homes Q4 2020 Earnings Report
Meritage Homes reported a record fourth quarter with a 420 bps increase in home closing gross margin, a 50% increase in diluted EPS, and a 52% increase in orders compared to the prior year.
Key Takeaways
Meritage Homes announced record fourth-quarter results, achieving its highest quarterly home closings and revenue in the company's history. The company's strategic focus on entry-level and first move-up markets allowed it to capitalize on significant demand, driving volume, profitability, and return on equity.
Total orders for the fourth quarter of 2020 were 52% higher year-over-year, driven by an 87% increase in absorptions per store.
Home closing revenue increased by 28% to $1.4 billion, reflecting a 32% higher home closing volume.
Home closing gross margin improved by 420 bps to 24.0% in the fourth quarter of 2020.
Net earnings were $152.5 million ($3.97 per diluted share) for this quarter, compared to $103.6 million ($2.65 per diluted share) for the same quarter in the prior year.
Revenue by Geographic Location
Forward Guidance
For the full year 2021, the company is projecting 11,500-12,500 home closings with home closing revenue between $4.2-4.6 billion, home closing gross margin of 22.0-23.0% and an effective tax rate of about 23.0%.
Positive Outlook
- Projecting 11,500-12,500 home closings for the full year 2021.
- Expecting home closing revenue between $4.2-4.6 billion for 2021.
- Anticipating home closing gross margin of 22.0-23.0% for the full year 2021.
- Expecting an effective tax rate of about 23.0% for 2021.
- Aiming to close out 2021 with approximately 235-245 communities.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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