M/I Homes Inc (MHO) Q3 2024 Earnings Call Highlights: Record Deliveries and Revenue Amidst ...

In This Article:

  • Homes Delivered: 2,271 homes, an 8% increase from the previous year.

  • Revenue: $1.1 billion, a 9% increase from last year.

  • Year-to-Date Revenue: Approximately $3.3 billion, an 8% increase over 2023.

  • Pre-Tax Income: $188.7 million, a 6% increase from last year.

  • Gross Margin: 27.1%, a third-quarter record, up 20 basis points from last year.

  • Return on Equity: 20%.

  • Book Value Per Share: $105, up 20% from a year ago.

  • Community Count: 217 at the end of the quarter, up from 204 a year ago.

  • Cash Balance: $720 million with no borrowings under the $650 million unsecured revolving credit facility.

  • Debt to Capital Ratio: 20%, down from 22% a year ago.

  • Earnings Per Diluted Share: $5.10, a 6% increase from $4.82 last year.

  • Mortgage and Title Operations Pre-Tax Income: $12.9 million, a 31% increase from last year.

  • Average Closing Price: $489,000, a 2% increase from last year's third quarter.

  • Interest Income Net Interest Expense: $6.7 million.

  • Effective Tax Rate: 23%.

  • Land Investment: $1.6 billion at quarter end, compared to $1.3 billion a year ago.

  • Stock Repurchase: $50 million spent in the third quarter, with 157 million remaining under current board authorization.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • M/I Homes Inc (NYSE:MHO) achieved record homes delivered, revenue, and income in the third quarter despite macroeconomic challenges.

  • The company closed a record 2,271 homes in the quarter, an 8% increase from the previous year.

  • Pre-tax income for the quarter increased by 6% to a record $188.7 million, with a year-to-date increase of 20% over 2023.

  • Gross margins for the quarter reached a record 27.1%, and the company achieved a 20% return on equity.

  • M/I Homes Inc (NYSE:MHO) has a strong land position with approximately 24,000 owned lots and 52,000 controlled lots, supporting future growth.

Negative Points

  • Interest rate volatility impacted traffic and demand, with mortgage rates rising above 7% during the quarter.

  • Hurricanes in Florida affected operations, leading to temporary closures and impacting sales and demand.

  • New contracts in the southern region were flat compared to the previous year, and deliveries in the southern region decreased by 7%.

  • The company experienced a 10% cancellation rate for the quarter.

  • Increased SG&A expenses due to higher community count, additional headcount, and increased selling expenses.

Q & A Highlights

Q: Can you discuss the differences in demand across various price points and how you plan to position the company for the upcoming spring selling season? A: Robert Schottenstein, CEO, explained that while affordability issues are real, M/I Homes benefits from a diverse product offering. The Smart Series and move-up products each account for about 50% of sales, providing flexibility. The company is optimistic about the spring selling season and plans to grow its community count, with no strategic shift planned in product mix.

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