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NVR Gears Up to Report Q3 Earnings: What's in the Offing?
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NVR, Inc.’s (NVR - Free Report) third-quarter 2022 earnings and revenues are expected to have increased on a year-over-year basis, courtesy of higher pricing and a solid backlog level.
In the last reported quarter, earnings missed the Zacks Consensus Estimate, but homebuilding revenues beat the same. On a year-over-year basis, earnings and total revenues (Homebuilding & Mortgage Banking fees combined) increased 50% and 16%, respectively.
NVR’s earnings topped the consensus mark in one of the last four quarters and missed on three other occasions, with the average negative surprise being 3.4%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has increased to $130.91 from $129.91 over the past 30 days. The estimated figure indicates an increase of 51.5% from the year-ago quarter. The consensus mark for revenues is pegged at $2.49 billion, suggesting a 6.4% increase from the year-ago reported figure of $2.34 billion.
NVR’s third-quarter Homebuilding revenues (accounting for more than 97% of total revenues in 2021) are expected to have increased from the year-ago level. The improvement was backed by a shortage of previously owned houses in the market and higher average price of settlements.
However, inflationary pressures have been a cause of concern. The companies in the industry have been experiencing significant material cost inflation along with escalating land, labor and material costs. Also, the adverse effects of tightening global and domestic supply chains may have been a concern.
NVR has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, which are expected to reflect on the bottom line. Again, given the ongoing affordability issues and higher mortgage rates in the industry, the company is expected to have witnessed lower orders in the quarter to be reported.
The Zacks Consensus Estimate for Homebuilding revenues is pegged at $2.67 billion, which indicates an increase from $2.34 million a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of +6.95%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank #5 (Strong Sell).
Here are some companies in the Zacks Construction sector, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #3.
PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.6%. Earnings for the to-be-reported quarter are expected to increase 51.7% year over year.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #1.
BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 27.1%. Earnings for the to-be-reported quarter are expected to increase 92.6% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 11.5%. Earnings for the to-be-reported quarter are expected to decline 1.6% year over year.
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NVR Gears Up to Report Q3 Earnings: What's in the Offing?
NVR, Inc.’s (NVR - Free Report) third-quarter 2022 earnings and revenues are expected to have increased on a year-over-year basis, courtesy of higher pricing and a solid backlog level.
In the last reported quarter, earnings missed the Zacks Consensus Estimate, but homebuilding revenues beat the same. On a year-over-year basis, earnings and total revenues (Homebuilding & Mortgage Banking fees combined) increased 50% and 16%, respectively.
NVR’s earnings topped the consensus mark in one of the last four quarters and missed on three other occasions, with the average negative surprise being 3.4%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has increased to $130.91 from $129.91 over the past 30 days. The estimated figure indicates an increase of 51.5% from the year-ago quarter. The consensus mark for revenues is pegged at $2.49 billion, suggesting a 6.4% increase from the year-ago reported figure of $2.34 billion.
NVR, Inc. Price and EPS Surprise
NVR, Inc. price-eps-surprise | NVR, Inc. Quote
Key Factors to Note
NVR’s third-quarter Homebuilding revenues (accounting for more than 97% of total revenues in 2021) are expected to have increased from the year-ago level. The improvement was backed by a shortage of previously owned houses in the market and higher average price of settlements.
However, inflationary pressures have been a cause of concern. The companies in the industry have been experiencing significant material cost inflation along with escalating land, labor and material costs. Also, the adverse effects of tightening global and domestic supply chains may have been a concern.
NVR has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, which are expected to reflect on the bottom line. Again, given the ongoing affordability issues and higher mortgage rates in the industry, the company is expected to have witnessed lower orders in the quarter to be reported.
The Zacks Consensus Estimate for Homebuilding revenues is pegged at $2.67 billion, which indicates an increase from $2.34 million a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of +6.95%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVR currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #3.
PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.6%. Earnings for the to-be-reported quarter are expected to increase 51.7% year over year.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #1.
BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 27.1%. Earnings for the to-be-reported quarter are expected to increase 92.6% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 11.5%. Earnings for the to-be-reported quarter are expected to decline 1.6% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.