Meritage Homes Q3 adjusted EPS falls more than expected as higher mortgage rates hurt orders
MTH•Meritage Homes reported Q3 adjusted EPS of $1.11, below the $1.18 analyst consensus, while home closing revenue fell 17% year over year to $1.16 billion. Home orders declined 15% as higher mortgage rates and macroeconomic uncertainty weighed on consumer sentiment.
1. Quarterly results
Meritage Homes reported Q3 net income of $68 million and adjusted EPS of $1.11, missing the $1.18 consensus estimate. Home closing revenue fell 17% year over year to $1.16 billion, reflecting lower closings and prices.
2. Orders and outlook
The company said rising mortgage rates and macroeconomic uncertainty contributed to a 15% year-over-year decline in home orders. Higher use of incentives and rate buy-downs, geographic mix, and higher lot and incentive costs weighed on prices and home closing gross margin. Meritage said it expects market conditions to remain unpredictable over the next several quarters and is focusing on preserving margins and maintaining liquidity. It repurchased $55 million in shares during the quarter.
