NVR Q2 Earnings: Profit Drops 29% but New Orders Rise 9%
NVR is trading near its 52-week low of $5,501.01 (9.7% above the low).
Summary
NVR reported a 29% drop in Q2 net income on lower revenue and compressed margins, but new orders rose 9% and backlog grew, offering a counterbalance to the profit decline.
Key Events · Earnings and Guidance · NVR
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Earnings Miss
Q2 net income fell 29% to $236.5M, with diluted EPS of $83.96 vs. $108.54 a year ago. Revenue declined 10.6% to $2.33B.
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Margin Compression
Homebuilding gross margin dropped to 19.2% from 21.5%, hurt by higher lot costs, pricing pressure, and $21.7M in land deposit impairments.
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New Order Growth
New orders increased 9% to 5,885 units, and the cancellation rate improved to 15% from 17%, indicating resilient buyer demand.
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Backlog Expansion
Backlog rose 9% in units to 10,998 and 5% in dollar value to $4.99B, providing revenue visibility despite near-term headwinds.
Analysis · NVR · Real Estate & Construction
NVR's second-quarter net income fell 29% to $236.5 million, with earnings per share of $83.96 missing last year's $108.54. Revenue dropped 10.6% to $2.33 billion, pressured by lower average selling prices and higher lot costs. Gross margin contracted to 19.2% from 21.5%, partly due to $21.7 million in land deposit impairments. However, new orders grew 9% to 5,885 units, and backlog increased 9% to 10,998 units, signaling resilient demand despite affordability headwinds. The results follow a challenging first quarter and a recently expanded $750 million buyback authorization, which may support shares as the housing cycle navigates mixed signals.
At the time of this filing, NVR was trading at $6,033.53 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $16.3B. The 52-week trading range was $5,501.01 to $8,618.28. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.