On July 24, 2024, Century Communities Inc (CCS, Financial) released its 8-K filing for the second quarter of 2024, showcasing impressive financial results that surpassed analyst expectations. Century Communities Inc is a leading homebuilder with operations across five homebuilding segments: West, Mountain, Texas, Southeast, and Century Complete, along with a financial services segment providing mortgage, title, and insurance services.
Performance Overview
Century Communities Inc reported a net income of $83.7 million, or $2.61 per diluted share, for Q2 2024, marking a 63% year-over-year increase. This performance exceeded the analyst estimate of $2.47 per share. The company's total revenues reached $1.0 billion, a 24% increase from the previous year, falling slightly short of the estimated revenue of $1.032 billion.
Home sales revenues also saw a significant rise, totaling $1.0 billion, up 24% year-over-year. The company delivered 2,617 homes during the quarter, a 17% increase compared to the same period last year. The average sales price of home deliveries was $388,800.
Key Financial Metrics
Adjusted net income, which excludes purchase price accounting and inventory impairment, was $85.2 million, or $2.65 per diluted share, reflecting a 66% year-over-year increase. The adjusted homebuilding gross margin was 24%, up 300 basis points from Q2 2023. Selling, general, and administrative expenses were 12.4% of home sales revenues.
Financial services revenues for the quarter were $21.7 million, with a pre-tax income of $5.7 million. The company's book value per share increased to a record $78.68 as of June 30, 2024.
Balance Sheet and Liquidity
Century Communities Inc ended Q2 2024 with $2.5 billion in stockholders' equity and $840.5 million in total liquidity, including $151.5 million in cash. The company maintained its quarterly cash dividend of $0.26 per share and repurchased 464,980 shares of its common stock for $37 million at an average share price of $79.61.
Homebuilding debt to capital was 31.1%, up from 29.4% at the end of Q1 2024, while net homebuilding debt to net capital was 28.1%, compared to 24.9% in Q1 2024.
Operational Highlights
Net new home contracts for Q2 2024 were 2,780, a 20% increase year-over-year. The company had 1,753 homes in backlog at the end of the quarter, representing a backlog dollar value of $754.6 million. The total lot inventory increased by 35% year-over-year to 78,097 lots, with controlled lots accounting for 58% of the total.
Guidance and Outlook
Given the strong performance in the first half of 2024, Century Communities Inc has increased its full-year guidance for home deliveries to a range of 10,700 to 11,300 homes and home sales revenues to a range of $4.2 to $4.4 billion.
“We continued to see solid demand for affordable new homes in the second quarter, with our net new contracts of 2,780 homes increasing by 20% versus the prior year quarter,” said Dale Francescon, Chairman and Co-Chief Executive Officer.
“Given the strength that we have seen in our orders, deliveries and community count through the first half of the year, we have increased our full year 2024 guidance for home deliveries to be in the range of 10,700 to 11,300 homes and our home sales revenues to be in the range of $4.2 to $4.4 billion,” commented Scott Dixon, Chief Financial Officer.
Conclusion
Century Communities Inc's strong Q2 2024 performance, marked by significant revenue growth and increased guidance, underscores its robust position in the homebuilding industry. The company's strategic focus on affordable housing and operational efficiency continues to drive its success, making it a noteworthy consideration for value investors.
Explore the complete 8-K earnings release (here) from Century Communities Inc for further details.
