NVR, Inc. Announces First Quarter Results
Friday April 20, 9:00 am ET
RESTON, Va., April 20 /PRNewswire-FirstCall/ -- NVR, Inc. (Amex: NVR - News), one of the nation's largest homebuilding and mortgage banking companies, announced that diluted earnings per share for its first quarter ended March 31, 2007 decreased 33% and net income decreased 36% when compared to the 2006 first quarter. Net income for the 2007 first quarter was $84,821,000, $12.96 per diluted share, compared to net income of $132,560,000, $19.48 per diluted share, for the same period of 2006. Consolidated revenues for the first three months of 2007 totaled $1,093,189,000, a 9% decrease from $1,204,655,000 for the comparable 2006 quarter.
Homebuilding
New orders in the first quarter of 2007 increased 8% to 3,917 units, when compared to 3,633 units in the first quarter of 2006. New orders in the Mid Atlantic and Mid East regions increased 18% and 11%, respectively, when compared to the first quarter of 2006. The Mid Atlantic region experienced an improvement in market conditions at the start of the quarter, however, market conditions slowed noticeably as the quarter progressed. The cancellation rate in the first quarter of 2007 was 16% compared to 17% in the first quarter of 2006 and 20% in the fourth quarter of 2006. The Washington DC cancellation rate in the quarter was 22% compared to 26% in the first quarter of 2006 and 34% in the fourth quarter of 2006.
Settlements decreased in the first quarter of 2007 to 2,700 units, 10% less than the same period of 2006. Homebuilding revenues for the three months ended March 31, 2007 totaled $1,075,110,000, 9% lower than the year earlier period. Income before tax from the homebuilding segment totaled $127,937,000, a decrease of 38% when compared to the first quarter of the previous year. Gross profit margins decreased to 20.6% in the 2007 first quarter compared to 27.3% for the same period in 2006. The decline in gross profit margins was due to continued pricing pressure in many of our markets. Land deposit impairments of approximately $12,000,000 negatively impacted gross profit margins by 114 basis points in the current quarter. The Company's backlog of homes sold but not settled at the end of the 2007 quarter decreased on a unit basis by 15% to 7,605 units from the same period last year. On a dollar basis, backlog dropped to $3,018,921,000, a decline of 23% when compared to the same period last year.
Mortgage Banking
Mortgage closed loan production of $715,039,000 for the three months ended March 31, 2007 was 3% lower than the same period last year. Sub-prime loans accounted for approximately 7% of our mortgage closed loan volume in the current quarter compared to 6% for the first quarter of 2006. Operating income for the mortgage banking operations during the first quarter of 2007 decreased 19% to $10,095,000, when compared to $12,481,000 reported for the same period of 2006.
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