Meritage Homes Corporation (MTH) has reported a 21.71 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $36.89 million, or $0.88 a share in the quarter, compared with $30.31 million, or $0.73 a share for the same period last year.
Revenue during the quarter grew 12.34 percent to $756 million from $672.96 million in the previous year period.
Cost of revenue rose 14.21 percent or $77.27 million during the quarter to $620.98 million. Gross margin for the quarter contracted 135 basis points over the previous year period to 17.86 percent.
Total expenses were $706.72 million for the quarter, up 13.88 percent or $86.14 million from year-ago period. Operating margin for the quarter contracted 126 basis points over the previous year period to 6.52 percent.
Operating income for the quarter was $49.28 million, compared with $52.37 million in the previous year period.
Revenue from real estate activities during the quarter increased 12.34 percent or $83.04 million to $756 million.
“We delivered another quarter of strong earnings growth as we continued to execute on our strategic plan,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “Earnings growth was driven primarily by increased home closing revenue on higher closing volumes. We delivered 1,800 homes during the quarter and celebrated the closing of our 100,000th home in October. We have expanded and diversified strategically over the past 31 years, and continue to have significant opportunities for growth.
Operating cash flow remains negative
Meritage Homes Corporation has spent $148.34 million cash to meet operating activities during the nine month period as against cash outgo of $53.25 million in the last year period.
The company has spent $12.35 million cash to meet investing activities during the nine month period as against cash outgo of $12.54 million in the last year period.
Cash flow from financing activities was $6.41 million for the nine month period, down 96.76 percent or $191.46 million, when compared with the last year period.
Cash and cash equivalents stood at $107.92 million as on Sep. 30, 2016, down 54.16 percent or $127.49 million from $235.41 million on Sep. 30, 2015.
Real estate inventory stood at $2,429.01 million as on Sep. 30, 2016. Net receivables were at $76.37 million as on Sep. 30, 2016, up 28.10 percent or $16.75 million from year-ago. Accounts payable surged 30.20 percent or $34.39 million to $148.26 million on Sep. 30, 2016.
Total assets grew 7.86 percent or $209.27 million to $2,873.16 million on Sep. 30, 2016. On the other hand, total liabilities were at $1,505.75 million as on Sep. 30, 2016, up 3.05 percent or $44.53 million from year-ago.
Return on assets moved down 3 basis points to 1.27 percent in the quarter. At the same time, return on equity moved up 18 basis points to 2.70 percent in the quarter.
Debt remains almost stable
Total debt was at $1,139.82 million as on Sep. 30, 2016, down 0.54 percent or $6.14 million from year-ago. Shareholders equity stood at $1,367.40 million as on Sep. 30, 2016, up 13.70 percent or $164.74 million from year-ago. As a result, debt to equity ratio went down 12 basis points to 0.83 percent in the quarter.
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