NVR, Inc. (NYSE: NVR) late Tuesday reported net income for its fourth quarter ended December 31, 2019 of $256,137,000, or $64.41 per diluted share. Analysts were expecting a gain of $58.65 per share. Net income and diluted earnings per share for the fourth quarter ended December 31, 2019 both increased by 10% when compared to 2018 fourth quarter net income of $232,158,000, or $58.57 per diluted share.
Consolidated revenues for the fourth quarter of 2019 totaled $1,990,195,000, which decreased slightly from $1,994,548,000 in the fourth quarter of 2018.
For the year ended December 31, 2019, consolidated revenues were $7,388,664,000, a 3% increase from $7,163,674,000 reported for 2018. Net income for the year ended December 31, 2019 was $878,539,000, an increase of 10% when compared to the year ended December 31, 2018. Diluted earnings per share for the year ended December 31, 2019 was $221.13, an increase of 14% from $194.80 per diluted share for 2018.
The company’s effective tax rate for the three and twelve months ended December 31, 2019 decreased to 13.3% and 14.4%, respectively, compared to 16.3% and 16.9% for the three and twelve months ended December 31, 2018, respectively. The effective tax rates for the 2019 fourth quarter and full year were favorably impacted by the retroactive reinstatement of certain expired energy tax credits under The Further Consolidated Appropriations Act, which resulted in the company recognizing a tax benefit of approximately $15,100,000 in the fourth quarter of 2019 related to homes settled in 2018 and 2019.
Additionally, the effective tax rate in each period was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $14,657,000 and $101,466,000 for three and twelve months ended December 31, 2019, respectively, and $18,870,000 and $77,478,000, for the three and twelve months ended December 31, 2018, respectively.
New orders in the fourth quarter of 2019 increased by 14% to 4,392 units, when compared to 3,841 units in the fourth quarter of 2018. The average sales price of new orders in the fourth quarter of 2019 was $381,100, an increase of 1% when compared with the fourth quarter of 2018. Settlements increased in the fourth quarter of 2019 to 5,331 units, which was 3% higher than the fourth quarter of 2018. The company’s backlog of homes sold but not settled as of December 31, 2019 decreased on a unit basis by 2% to 8,233 units and decreased on a dollar basis by 1% to $3,130,282,000 when compared to December 31, 2018.
Home building revenues of $1,946,859,000 in the fourth quarter of 2019 decreased slightly compared to $1,954,403,000 in the fourth quarter of 2018. Gross profit margin in the fourth quarter of 2019 increased to 19.5%, compared to 18.6% in the fourth quarter of 2018.
New orders for the year ended December 31, 2019 increased by 7% to 19,536 units, when compared to 18,281 units in 2018. Settlements increased 7% year over year to 19,668 units in 2019 from 18,447 units in 2018.
Home building revenues for the year ended December 31, 2019 totaled $7,220,844,000, which was 3% higher than 2018. Gross profit margin for the year ended December 31, 2019 was 19.0%, compared to 18.7% in 2018. Income before tax for the home building segment for the year ended December 31, 2019 was $923,879,000, a 6% increase when compared to 2018.
Mortgage closed loan production in the fourth quarter of 2019 totaled $1,418,742,000, an increase of 5% when compared to the fourth quarter of 2018. Income before tax from the mortgage banking segment totaled $25,257,000 in the fourth quarter of 2019, an increase of 13% when compared to $22,364,000 in the fourth quarter of 2018.
Mortgage closed loan production for the year ended December 31, 2019 increased 7% to $5,164,725,000. Income before tax from the mortgage banking segment for the year ended December 31, 2019 increased 15% to $101,916,000 from $88,626,000 in 2018.
On January 24, 2020, Jeff Martchek, president of home building operations, provided notice of his intention to retire. Martchek has been employed by NVR since 1988. Martchek’s retirement will be effective in the second quarter of 2020 upon the orderly transition of his duties.
