NVR Posts First-Quarter Profit
Home-building giant NVR, bouncing back from a 2008 fourth-quarter loss, posted a profit for the first three months of 2009, showing resiliency in the face of one of the nation's worst housing markets.
The Reston-based company said profit for the quarter ended March 31, was $18 million, or $3.02 per diluted share, a 59 decrease from 2008's first quarter, when it posted profit of $43.5 million, or $7.42 per share. Revenue totaled $548.3 million, a 37 percent decline from $869.9 million for the comparable 2008 quarter.
The results were an improvement on NVR's year-end finish, when it posted a fourth-quarter loss of $30.5 million, its first loss of the housing bust.
NVR is the Washington area's most active home builder and has largely avoided the steep losses and bankruptcy protection filings of some of its home-building peers by pursuing a conservative land acquisition strategy. Rather than buying property outright, it controls land with options to buy when it's ready to build. The vast majority of its loss last quarter stemmed from a $109.8 million write-down of the value of those land deposits. This time around, the company had zero write-downs on its land deposits.
Home-building remained weak during the quarter, however, as the economy continued its downward spiral with consumer confidence dropping and job losses mounting. New orders in the first quarter of 2009 decreased 11 percent to 2,426 units, the company said. The cancellation rate in the first quarter of 2009 was 15 percent, compared with 22 percent in the first quarter of 2008 and 30 percent in the fourth quarter of 2008. The average sales price of new orders in the first quarter of 2009 fell 12 percent from the first quarter of 2008.
The company also reported closed mortgage loan production of $427.3 million for the three months ended March 31, an 18 decline from the same period last year.
The company's shares rose about 6 percent in recent trading on the New York Stock Exchange, to $484.79.
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