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NVR Whiffs on Earnings

By Seth Jayson – Updated Apr 10, 2017 at 6:42AM

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Just the facts, Fool.

NVR (NYSE: NVR) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), NVR met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased significantly. GAAP earnings per share expanded.

Gross margins contracted, operating margins expanded, net margins shrank.

Revenue details
NVR recorded revenue of $1.01 billion. The seven analysts polled by S&P Capital IQ predicted sales of $1.02 billion on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $771.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $10.11. The eight earnings estimates compiled by S&P Capital IQ averaged $12.14 per share. GAAP EPS of $10.11 for Q2 were 13% higher than the prior-year quarter's $8.97 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 16.6%, 130 basis points worse than the prior-year quarter. Operating margin was 8.4%, 10 basis points better than the prior-year quarter. Net margin was 5.0%, 110 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.09 billion. On the bottom line, the average EPS estimate is $14.80.

Next year's average estimate for revenue is $4.08 billion. The average EPS estimate is $50.54.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 250 members out of 518 rating the stock outperform, and 268 members rating it underperform. Among 161 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 83 give NVR a green thumbs-up, and 78 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NVR is hold, with an average price target of $959.43.

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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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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