M/I Homes' mortgages held for sale remain steady as it set 3Q records
Builder M/I Homes set third-quarter records in four areas and recorded consistent levels of mortgages held for sale in its most recent earnings results.
The company held more than $115 million in mortgages for sale in the third quarter, up from almost $92 million a year ago and $108 million the previous quarter; and its numbers for new contracts, homes delivered, revenue and income were the highest it has ever recorded between July and September.
M/I Homes recorded $1.03 earnings per share for the quarter as a result, which beat the Zacks consensus estimate of $0.94 per share. Its stock started the day slightly higher in response.
"Our growth in pretax income, combined with a lower tax rate, resulted in a 31% increase in net income from $22.3 million in last year's third quarter to a third-quarter record of $29.3 million," President and CEO Robert Schottenstein said in a press release.
The company delivered 1,422 homes during the quarter, representing a 13% increase from a year ago. Its pretax income was up 14% from a year ago and totaled almost $40 million.
"We are particularly pleased that our adjusted gross margin improved 50 basis points from the second quarter to 20.5%, and our overhead expense ratio improved 40 basis points from last year's third quarter to 12.7%," Schottenstein said.
The company's earnings improved despite the fact it took a small pretax purchase accounting charge of two cents related to its acquisition of Pinnacle Homes. M/I Homes acquired Pinnacle in the first quarter.