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Dec 31, 2022
Meritage Homes Q4 2022 Earnings Report
Meritage Homes finished 2022 with record fourth quarter results, including a 29% increase in home closings and a 32% increase in home closing revenue.
Key Takeaways
Meritage Homes reported a strong fourth quarter in 2022, with a 29% increase in home closings and a 32% increase in home closing revenue. Diluted EPS was $7.09, a 13% year-over-year increase. However, the company noted that ongoing economic uncertainty continued to impact buyer psychology and undermine housing demand, leading to a 46% decrease in fourth quarter orders.
Home closings increased by 29% year-over-year, driving $2.0 billion in home closing revenue.
Diluted EPS increased by 13% year-over-year to $7.09.
Sales orders decreased by 46% due to elevated cancellations, with a cancellation rate of 39%.
The company ended the year with over $860 million in cash and increased community count by 5% year-over-year to 271 active communities.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Meritage Homes did not provide specific financial guidance for the next quarter or full year 2023 in the earnings report. However, they expressed confidence in their ability to capture market share by focusing on affordable, move-in ready products.
Positive Outlook
- Favorable demographics and low supply of new and resale housing inventory should drive long-term demand.
- Company believes they have the right level of completed and near-completed homes to sell in nearly all of their stores.
- Company is working to find the market clearing price to get back to their target absorption pace of 3-4 net sales per month.
- Strategy is centered on affordable, move-in ready product, which they believe will allow them to continue to capture market share.
- Company remains focused on balance sheet discipline and ended the year with over $860 million in cash.
Challenges Ahead
- Ongoing economic uncertainty continued to impact buyer psychology and undermine housing demand.
- Sales orders of 1,808 homes were 46% lower than prior year primarily due to elevated cancellations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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