On October 23, 2024, Century Communities Inc (CCS, Financial) released its 8-K filing detailing its financial results for the third quarter ended September 30, 2024. The company, a prominent player in the residential construction market, reported significant growth in home sales revenues and deliveries, setting new records in several operational metrics.
Company Overview
Century Communities Inc is a leading construction company specializing in residential markets across the United States. It operates through five homebuilding segments: West, Mountain, Texas, Southeast, and Century Complete, along with a financial services segment offering mortgage, title, and insurance services. The company primarily focuses on developing single-family homes and markets them through various channels, including direct sales and online platforms.
Performance Highlights and Challenges
For the third quarter of 2024, Century Communities reported home sales revenues of $1.1 billion, marking a 29% increase year-over-year, surpassing the analyst estimate of $1,097.03 million. The company delivered 2,834 homes, a 25% increase from the previous year, and recorded net new home contracts of 2,563, up 19% year-over-year. Despite these achievements, the company's earnings per share (EPS) of $2.59 fell slightly short of the analyst estimate of $2.62.
The company's performance underscores the robust demand for affordable housing, yet it faces challenges such as rising costs and potential economic uncertainties that could impact future growth. The increase in community count to a record 305, up 21% year-over-year, reflects the company's strategic expansion efforts.
Financial Achievements and Industry Significance
Century Communities' financial achievements are significant in the real estate industry, where revenue growth and operational efficiency are critical. The company's adjusted homebuilding gross margin stood at 23.6%, while selling, general, and administrative expenses were reduced to 11.9% of home sales revenues, showcasing effective cost management.
Key Financial Metrics
Net income for the quarter was $83.0 million, or $2.59 per diluted share, with adjusted net income at $87.0 million, or $2.72 per diluted share. The average sales price of home deliveries was $393,800. The company's backlog at the end of the quarter included 1,580 homes valued at $671.4 million.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Home Sales Revenues | $1.1 Billion | $865.1 Million | 29% |
| Deliveries | 2,834 Homes | 2,264 Homes | 25% |
| Net New Home Contracts | 2,563 | 2,149 | 19% |
Balance Sheet and Liquidity
Century Communities ended the quarter with $2.5 billion in stockholders' equity and $605.9 million in total liquidity, including $219.9 million in cash. The company's homebuilding debt to capital ratio increased to 35.8% from 31.1% in the previous quarter, indicating a higher leverage level.
Outlook and Strategic Initiatives
Looking ahead, Century Communities has raised its full-year 2024 guidance for home deliveries to between 10,900 and 11,300 homes, with home sales revenues projected to range from $4.3 to $4.4 billion. The company's strategic acquisition of Anglia Homes aligns with its goal of expanding market share and accessing capital-efficient finished lots.
“We saw strong growth in our net new contracts and deliveries in the third quarter as demand for affordable new homes remains solid,” said Dale Francescon, Chairman and Co-Chief Executive Officer.
Century Communities' robust performance in the third quarter highlights its ability to capitalize on market demand while navigating industry challenges. The company's strategic initiatives and financial discipline position it well for continued growth in the competitive real estate market.
Explore the complete 8-K earnings release (here) from Century Communities Inc for further details.
