LGI Homes, Inc. (Nasdaq:LGIH), The Woodlands, Tex, on Tuesday reported net income of $23.2 million, or $1.09 per basic share and $1.01 per diluted share, for the fourth quarter of 2016 ended Dec. 31, up $7.5 million, or 47.5%, from $15.7 million for the fourth quarter of 2015. Analysts were expecting a profit of $0.94 per share, per Dow Jones.
Home sales revenues for the quarter were $236.8 million, an increase of $60.1 million, or 34.0% over the fourth quarter of 2015. Home closings increased 20.4% to 1,139 from 946 during the 2015 quarter. Active selling communities increased to 63 at the end of the fourth quarter of 2016, up from 59 communities at the end of the third quarter of 2016.
The average home sales price was $207,928 for the fourth quarter of 2016, an increase of 11.3% over the fourth quarter of 2015. The increase was due to changes in product mix, price points in new markets, and a favorable pricing environment.
Active selling communities at quarter-end increased to 63 from 52 and total owned and controlled lots increased to 29,460 lots.
Gross margin as a percentage of home sales revenues for the fourth quarter of 2016 was 27.2% compared to 26.5% for the fourth quarter of 2015. Adjusted gross margin (non-GAAP) as a percentage of home sales revenues for the fourth quarter of 2016 was 28.5% as compared to 27.6% for the fourth quarter of 2015. The company said the increase was due to a combination of higher average home sales price and benefits of managing overall construction costs.
The company did not report SG&A as a percentage of home sales revenue or new orders in its news release.
Said Eric Lipar, chairman and CEO, “Our fourth quarter provided a solid finish with a record-breaking 4,163 homes closed for the year, achieving significant growth in revenues and active community count, and increasing basic earnings per share 36.2% over the prior year.”
“As we turn our attention to 2017, we remain focused on delivering strong results. Although we have only closed 396 homes through February, our sales to date in 2017 have been strong and we believe these will fuel our future closings over the next few months. As a result, we maintain our positive outlook on the year.”
