On July 24, 2024, Meritage Homes Corp (MTH, Financial) released its 8-K filing detailing the company's financial performance for the second quarter of 2024. Meritage Homes Corp, a leading designer and builder of single-family homes, operates in ten states across three regions: West, Central, and East. The company focuses on homebuilding and financial services, with the homebuilding segment being the primary revenue generator.
Performance Highlights
Meritage Homes Corp reported a robust second quarter, with significant improvements across key financial metrics. The company closed 4,118 homes, an 18% increase year-over-year, contributing to a 10% rise in home closing revenue to $1.69 billion. The average sales price for closings decreased by 7% to $411,000, reflecting a shift in product and geographic mix.
Net earnings for the quarter were $231.6 million, up 24% from the previous year, resulting in a diluted EPS of $6.31, surpassing the analyst estimate of $5.02. The company's home closing gross margin improved to 25.9%, up from 24.4% in the prior year, driven by lower direct costs and greater leverage of fixed costs.
Financial Achievements
Meritage Homes Corp's financial achievements underscore its strategic focus on delivering affordable, move-in ready homes. The company reported a 14% increase in home orders to 3,799 units, with a 7% rise in home order value to $1.57 billion. The ending backlog value, however, decreased by 34% to $1.11 billion, indicating a faster conversion of backlog to closings.
“Meritage’s strong second quarter 2024 performance reflected the progress we are making on delivering quick turning move-in ready homes, resulting in $1.7 billion of home closing revenue and our highest second quarter closings," said Steven J. Hilton, executive chairman of Meritage Homes.
Income Statement and Key Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Homes Closed (units) | 4,118 | 3,490 | 18% |
| Home Closing Revenue ($) | 1,693,738 | 1,543,021 | 10% |
| Net Earnings ($) | 231,555 | 186,836 | 24% |
| Diluted EPS ($) | 6.31 | 5.02 | 26% |
The company's balance sheet remains strong, with cash and cash equivalents totaling $992.9 million as of June 30, 2024. Meritage Homes Corp also reported a net debt-to-capital ratio of 6.2%, reflecting prudent financial management and a focus on long-term shareholder value.
Analysis and Outlook
Meritage Homes Corp's performance in the second quarter of 2024 highlights its ability to navigate market challenges, including mortgage interest rate volatility. The company's strategic focus on affordable, move-in ready homes has resonated well with homebuyers, driving significant growth in home closings and orders.
Looking ahead, Meritage Homes Corp has provided updated guidance for the full year 2024, projecting home closing volume between 14,750 and 15,500 units and home closing revenue between $6.1 billion and $6.3 billion. The company expects a home closing gross margin of 24.5% to 25.0% and diluted EPS between $19.80 and $21.00.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Meritage Homes Corp for further details.
