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MDC Gears Up to Report Q2 Earnings: Here's What to Expect
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M.D.C. Holdings, Inc. is scheduled to report second-quarter 2023 results on Jul 27, 2023, before market opens.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 145.5% and 18.1%, respectively. On a year-over-year basis, earnings and revenues declined 46.5% and 17.3%, respectively.
MDC’s earnings beat the consensus mark twice but miss the same on two other occasions, the positive average surprise being 27.8%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings moved up 3% to 69 cents per share in the past 30 days. The estimated figure indicates a 73.4% decline from the year-ago quarter’s earnings of $2.59. The consensus mark for revenues is pegged at $937.81 million, suggesting a decline of 36.9% from the prior-year quarter’s reported figure.
MDC is likely to have generated tepid earnings and revenues in second quarter as moderation in the housing demand due to higher mortgage rates will impact the results. Also, the uncertain economic scenario, material cost inflation, and higher wages are impacting the U.S. housing market's affordability. This is likely to have affected MDC’s top-line performance.
For second-quarter 2023, MDC expects home deliveries to be within 1,600-1,700 units compared with 2,536 units delivered a year ago. Our model predicts deliveries to decline 34.3% year over year to 1,665 units.
MDC expects average selling price or ASP for the quarter to be approximately $550,000 compared with $556,000 reported a year ago, in line with our model prediction.
We expect the Homebuilding revenues to decrease 36.9% to $915.8 million from $1,450.8 million a year ago due to lower deliveries. Our model predicts the Financial Services revenues to decline 36.9% year over year to $22.8 million.
Furthermore, the bottom line of MDC is likely to be affected by higher land, labor and material costs. The company anticipates housing gross margin (assuming no impairments or warranty adjustments) to be at 17% compared with 25.7% reported in the prior-year period.
Our model predicts homebuilding gross margins (excluding inventory impairments) to be 17% for the quarter, down from the year-ago period’s levels.
The company's focus on growing demand for entry-level homes and strategic initiatives are likely to help it partially offset the adverse effects of the aforementioned risks.
Meanwhile, we expect the company’s new orders to increase 31.9% year over year to 1,851 units in the quarter. Our model predicts new orders ASP to decline 4.9% year over year to $597.5 million.
Our model predicts total backlog to decrease 56.8% to 3076 units from 7426 units a year ago. We expect the total backlog ASP to increase 0.8% year over year to $602.1 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for MDC for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: MDC has an Earnings ESP of -2.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: MDC currently sports a Zacks Rank #1.
Stocks With Favorable Combinations
Here are some companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +5.54% and a Zacks Rank #2.
LPX’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 98.2%. Earnings for the to-be-reported quarter are expected to decrease 84.7% year over year.
OC’s earnings topped the consensus mark in all the last four quarters, the average being 15.1%. Earnings for the to-be-reported quarter are expected to decrease 13.8% year over year.
AECOM (ACM - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank #2.
ACM’s earnings topped the consensus mark in all the last four quarters, the average being 4.8%. Earnings for the to-be-reported quarter are expected to increase 10.5% year over year.
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MDC Gears Up to Report Q2 Earnings: Here's What to Expect
M.D.C. Holdings, Inc. is scheduled to report second-quarter 2023 results on Jul 27, 2023, before market opens.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 145.5% and 18.1%, respectively. On a year-over-year basis, earnings and revenues declined 46.5% and 17.3%, respectively.
MDC’s earnings beat the consensus mark twice but miss the same on two other occasions, the positive average surprise being 27.8%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings moved up 3% to 69 cents per share in the past 30 days. The estimated figure indicates a 73.4% decline from the year-ago quarter’s earnings of $2.59. The consensus mark for revenues is pegged at $937.81 million, suggesting a decline of 36.9% from the prior-year quarter’s reported figure.
M.D.C. Holdings, Inc. Price and EPS Surprise
M.D.C. Holdings, Inc. price-eps-surprise | M.D.C. Holdings, Inc. Quote
Factors to Note
MDC is likely to have generated tepid earnings and revenues in second quarter as moderation in the housing demand due to higher mortgage rates will impact the results. Also, the uncertain economic scenario, material cost inflation, and higher wages are impacting the U.S. housing market's affordability. This is likely to have affected MDC’s top-line performance.
For second-quarter 2023, MDC expects home deliveries to be within 1,600-1,700 units compared with 2,536 units delivered a year ago. Our model predicts deliveries to decline 34.3% year over year to 1,665 units.
MDC expects average selling price or ASP for the quarter to be approximately $550,000 compared with $556,000 reported a year ago, in line with our model prediction.
We expect the Homebuilding revenues to decrease 36.9% to $915.8 million from $1,450.8 million a year ago due to lower deliveries. Our model predicts the Financial Services revenues to decline 36.9% year over year to $22.8 million.
Furthermore, the bottom line of MDC is likely to be affected by higher land, labor and material costs. The company anticipates housing gross margin (assuming no impairments or warranty adjustments) to be at 17% compared with 25.7% reported in the prior-year period.
Our model predicts homebuilding gross margins (excluding inventory impairments) to be 17% for the quarter, down from the year-ago period’s levels.
The company's focus on growing demand for entry-level homes and strategic initiatives are likely to help it partially offset the adverse effects of the aforementioned risks.
Meanwhile, we expect the company’s new orders to increase 31.9% year over year to 1,851 units in the quarter. Our model predicts new orders ASP to decline 4.9% year over year to $597.5 million.
Our model predicts total backlog to decrease 56.8% to 3076 units from 7426 units a year ago. We expect the total backlog ASP to increase 0.8% year over year to $602.1 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for MDC for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: MDC has an Earnings ESP of -2.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: MDC currently sports a Zacks Rank #1.
Stocks With Favorable Combinations
Here are some companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +5.54% and a Zacks Rank #2.
LPX’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 98.2%. Earnings for the to-be-reported quarter are expected to decrease 84.7% year over year.
Owens Corning (OC - Free Report) has an Earnings ESP of +2.10% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
OC’s earnings topped the consensus mark in all the last four quarters, the average being 15.1%. Earnings for the to-be-reported quarter are expected to decrease 13.8% year over year.
AECOM (ACM - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank #2.
ACM’s earnings topped the consensus mark in all the last four quarters, the average being 4.8%. Earnings for the to-be-reported quarter are expected to increase 10.5% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.