NVR Inc. (NYSE:NVR), Reston, reported Thursday net income for its first quarter ended March 31, 2017 of $102,923,000, or $25.12 per diluted share, up 58% and 59%, respectively, when compared to the 2016 first quarter of $65,303,000, or $15.79 per diluted share. Analysts were expecting a profit of $20.52 per share.
Consolidated revenues for the first quarter of 2017 totaled $1,277,092,000, a 12% increase from $1,144,026,000 for the comparable 2016 quarter. Net income and earnings per share were boosted by a reduction in the company’s effective tax rate in the first quarter of 2017 to 22.1% from 36.8% in the first quarter of 2016 due to the company’s January 1, 2017 adoption of Accounting Standard Update 2016-09, which resulted in the company recognizing an income tax benefit of $19,900,000 related to excess tax benefit from stock option exercises in the first quarter of 2017. Excluding the impact of the excess tax benefit recognized in the first quarter of 2017, the effective tax rate would have been 37.2%. Additionally, the excess tax benefit in the first quarter of 2017 favorably impacted diluted earnings per share by $4.86 per share.
Settlements increased in the first quarter of 2017 to 3,256 units, 8% higher than the first quarter of 2016. The company’s backlog of homes sold but not settled as of March 31, 2017 increased on a unit basis by 9% to 8,052 units and increased on a dollar basis by 13% to $3,193,777,000 when compared to March 31, 2016.
New orders in the first quarter of 2017 increased 7% to 4,424 units, when compared to 4,137 units in the first quarter of 2016. The average sales price of new orders in the first quarter of 2017 was $392,600, an increase of 5% when compared with the first quarter of 2016. The cancellation rate in the first quarter of 2017 was 16%, compared with 15% in the first quarter of 2016.
Home building revenues in the first quarter of 2017 totaled $1,247,587,000, 11% higher than the year earlier period. Gross profit margin in the first quarter of 2017 was 17.8%, compared to 17.5% in the first quarter of 2016. Income before tax from the home building segment totaled $117,190,000 in the first quarter of 2017, an increase of 25% when compared to the first quarter of 2016.
Mortgage closed loan production in the first quarter of 2017 totaled $843,341,000, an increase of 12% when compared to the first quarter of 2016. Income before tax from the mortgage banking segment for the first quarter of 2017 was $14,971,000, compared to $9,658,000 for the first quarter of 2016.
