Meritage Homes Increases Sales but Misses Revenue Estimate

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Meritage Homes (NYS: MTH) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Meritage Homes missed slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved and GAAP earnings per share dropped.

Margins contracted across the board.

Revenue details
Meritage Homes logged revenue of $246.0 million. The 11 analysts polled by S&P Capital IQ looked for net sales of $250.0 million. Sales were 15% higher than the prior-year quarter's $214.6 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.06. The eight earnings estimates compiled by S&P Capital IQ predicted $0.09 per share on the same basis. GAAP EPS were -$0.36 for Q4 against -$0.03 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.5%, 460 basis points worse than the prior-year quarter. Operating margin was -2.2%, 590 basis points worse than the prior-year quarter. Net margin was -4.8%, 440 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $204.3 million. On the bottom line, the average EPS estimate is -$0.01.

Next year's average estimate for revenue is $986.2 million. The average EPS estimate is $0.72.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Meritage Homes is hold, with an average price target of $22.17.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Meritage Homes. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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