NVR 3Q net income rises, new home orders up
RESTON, Va. -- NVR's net income jumped 22 percent in the third quarter thanks to rising new home orders rose and more mortgage loans being closed.
The homebuilder and mortgage company breezed past Wall Street expectations and shares at one point traded close to $914, a seven-year high.
The housing market has been showing some signs of a recovery as people take advantage of low mortgage rates. On Thursday, mortgage buyer Freddie Mac reported that the rate on the 30-year fixed mortgage fell near its record low, while the 15-year fixed mortgage set a record low of 2.66 percent.
Lower rates have also persuaded more people to refinance as well and builders are growing more confident after five dreadful years for the industry.
The Commerce Department reported Wednesday that builders last month started construction on single-family houses and apartments at the fastest rate in more than four years. What's more, there are plans to build homes at an even faster pace in coming months.
For the three months ended Sept. 30, NVR earned $53 million, or $10.33 per share. That compares with $43.4 million, or $7.98 per share, in the same period last year.
Analysts had expected profits of only $9.44 per share, according to a FactSet survey.
Revenue climbed to $870.6 million, up 23 percent. That easily topped Wall Street projections of $847.8 million.
New home orders rose 15 percent to 2,558 units, with backlog _ which is an indicator of potential future revenue _ increasing 27 percent to 4,950 units.
Revenue for the homebuilding segment climbed 23 percent to $854.4 million.
Mortgage close loan production rose 21 percent to $594.9 million.
Shares of NVR Inc. jumped $24.02, or 2.7 percent, to $900.01 morning trading Thursday.