|NVR, Inc. Announces Fourth Quarter And Full Year Results|
RESTON, Va., Jan. 25, 2019 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2018 of $232,158,000, or $58.57 per diluted share. Net income and diluted earnings per share for the fourth quarter ended December 31, 2018 increased 86% and 103%, respectively, when compared to 2017 fourth quarter net income of $124,619,000, or $28.88 per diluted share. Consolidated revenues for the fourth quarter of 2018 totaled $1,994,548,000, a 10% increase from $1,816,336,000 in the fourth quarter of 2017.
For the year ended December 31, 2018, consolidated revenues were $7,163,674,000, a 14% increase from $6,305,840,000 reported for 2017. Net income for the year ended December 31, 2018 was $797,197,000, an increase of 48% when compared to the year ended December 31, 2017. Diluted earnings per share for the year ended December 31, 2018 was $194.80, an increase of 54% from $126.77 per diluted share for 2017.
Net income and diluted earnings per share were favorably impacted by a reduction in the Company's effective tax rate. The effective tax rates for the fourth quarter and year ended December 31, 2018 were 16.3% and 16.9%, respectively, compared to 52.3% and 36.5% for the fourth quarter and year ended December 31, 2017, respectively. The lower effective tax rate in 2018 resulted primarily from the enactment of the Tax Cuts and Jobs Act in December 2017, which had the following impacts on comparability between periods:
Additionally, the effective tax rates for the fourth quarter and year ended December 31, 2018 were favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $18,870,000 and $77,478,000, respectively. For the fourth quarter and year ended December 31, 2017, the income tax benefit related to excess tax benefits from stock option exercises totaled $13,960,000 and $58,681,000, respectively.
New orders in the fourth quarter of 2018 decreased by 11% to 3,841 units, when compared to 4,306 units in the fourth quarter of 2017. The average sales price of new orders in the fourth quarter of 2018 was $376,100, a decrease of 1% when compared with the fourth quarter of 2017. Settlements increased in the fourth quarter of 2018 to 5,186 units, which was 12% higher than the fourth quarter of 2017. The Company's backlog of homes sold but not settled as of December 31, 2018 decreased on a unit basis by 2% to 8,365 units and decreased on a dollar basis by 4% to $3,152,873,000 when compared to December 31, 2017.
Homebuilding revenues in the fourth quarter of 2018 totaled $1,954,403,000, 10% higher than the year earlier period. Gross profit margin in the fourth quarter of 2018 decreased to 18.6%, compared to 19.3% in the fourth quarter of 2017. Income before tax from the homebuilding segment totaled $255,074,000 in the fourth quarter of 2018, an increase of 5% when compared to the fourth quarter of 2017.
New orders for the year ended December 31, 2018 increased by 4% to 18,281 units, when compared to 17,608 units in 2017. Settlements increased 16% year over year to 18,447 units in 2018 from 15,961 units in 2017. Homebuilding revenues for the year ended December 31, 2018 totaled $7,004,304,000, which was 13% higher than 2017. Gross profit margin for the year ended December 31, 2018 was 18.7%, compared to 19.2% in 2017. Income before tax for the homebuilding segment for the year ended December 31, 2018 was $871,106,000, a 12% increase when compared to 2017.
Mortgage closed loan production in the fourth quarter of 2018 totaled $1,356,430,000, an increase of 10% when compared to the fourth quarter of 2017. Income before tax from the mortgage banking segment totaled $22,364,000 in the fourth quarter of 2018, an increase of 15% when compared to $19,518,000 in the fourth quarter of 2017.
Mortgage closed loan production for the year ended December 31, 2018 increased 14% to $4,829,406,000. Income before tax from the mortgage banking segment for the year ended December 31, 2018 increased 26% to $88,626,000 from $70,541,000 in 2017.
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-two metropolitan areas in fourteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com.
Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should" or "anticipates" or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by NVR in its homebuilding operations; shortages of labor; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law.
SOURCE NVR, Inc.