Yahoo Finance Taylor Morrison Home Corp (TMHC) Q1 2024 Earnings Call Transcript Highlights: Strong ...
Net Income: $190 million
Earnings Per Share (EPS): $1.75 per diluted share
Revenue: Homebuilding revenue of $1.6 billion
Gross Margin: Home closings gross margin of 24%
Home Deliveries: 2,731 homes delivered
Average Home Closing Price: Approximately $599,000
Annual Home Delivery Guidance: Raised to approximately 12,500 homes
Backlog: Over 6,200 homes
Net Sales Orders: Increased 29% year-over-year
Monthly Sales Pace: 3.7% per community
Financial Services Revenue: $47 million with a gross margin of 46.5%
Share Repurchases: 1.5 million shares for $92 million
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you elaborate on the pace of sales for first-time buyers and the impact of rising rates as the quarter progressed? A: (Sheryl Denise Palmer - Chairman, President & CEO) The pace for first-time buyers was strong, up significantly year-over-year. Despite rising rates towards the end of the quarter, the impact on conventional buyers was modest, with a slight increase in DTI and monthly payments. However, FHA buyers, with lower average incomes, would see more significant impacts on their payments and DTI ratios if rates rose to 7.5%.
Q: How have incentives trended in the quarter, and what are your expectations going forward? A: (Sheryl Denise Palmer - Chairman, President & CEO) Year-over-year, incentives have decreased meaningfully, and quarter-over-quarter, they were modestly up. Incentives tend to correlate with interest rates. The guidance assumes that incentives will remain manageable, depending on rate movements.
Q: Can you discuss the factors behind the improvement in underwritten gross margins over the past four years? A: (Erik Heuser - Executive VP & Chief Corporate Operations Officer) The improvement is attributed to more self-development of land, operational efficiencies due to scale, and general market efficiencies. The company's focus on self-developing land off-balance sheet has contributed to higher expected gross margins.
Q: What trends are you seeing in the availability and cost of off-balance sheet capital for land development? A: (Erik Heuser - Executive VP & Chief Corporate Operations Officer) The cost of capital varies by the type of arrangement, such as joint ventures, land banking, and seller financing. Overall, the blended cost remains attractive, supporting the company's strategy of off-balance sheet land development.
Q: How is the Florida market performing, especially given recent concerns about a slowing market there? A: (Sheryl Denise Palmer - Chairman, President & CEO) Florida had a strong quarter, with consistent traffic and conversions. The more affordable segments, like in Orlando, required more effort to close deals, but overall, the market remains healthy.
Q: Could you provide insights into the acquisition of Pyatt Builders and its strategic fit for entering the Indianapolis market? A: (Sheryl Denise Palmer - Chairman, President & CEO) The acquisition was strategically fitting and financially accretive, with no goodwill involved. Indianapolis was chosen for its market size, availability of finished lots, and a strong veteran management team. The market's low volatility and affordability are aligned with Taylor Morrison's portfolio strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
