LGIH beats by....$0.32!!!

What HAPPENED?? Gross margin. $1.10 eps, fully diluted. My model was not so bad on the other line items. I would have come in at $1.07 if I had guessed that. I used 24% due to the high inflation in construction costs. But…

Well, more comparisons later. Ought to get a pop today

KC

7 Likes

Post mortem: The beat was in two places that we can see. They predicted GM 24% to 26% for the year but came in 24.6%. I went with the low end. Second, I increased the SG&A over '17 full year anticipating similar increases Q4 to Q1 in previous years. It appears that SG&A matched '17 full year. Too clever by half, I was. Not sure if the taxes were different than I forecasted, might be something there.

May not get any upward price action, though. Confirmed full year guidance and did not increase the GM range. :frowning: Still looking at $6 to $7 for the year. Still, even “only” $7 and a 15 p/e…

Back to the drawing board on full year.

KC

2 Likes

Yes, taxes:

a 58.2% decrease in the effective tax rate and a decrease in operating leverage realized related to selling, general, and administrative expenses. For the three months ended March 31, 2018, the Company’s effective tax rate of 12.6% was lower than the statutory rate primarily as a result of the deductions in excess of compensation cost (“windfalls”) for share-based payments.

That means the SG&A was more like my estimate. Would have to be around 15.5%. ? Statutory rate would be 21.5% which is less than I estimated. Could well open down.

KC

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Sold 80% of position at $80.01.

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Getting late over here. Have to get up in 6 hours for outpatient procedure. Trading at $75.01. There definitely is robo trading. Popped up on the headline numbers for a half-hour or so. Then real people read some details and down $6 or more from the top, $5 below my sale. Looks to me as though they can hit the $7/share for '18 if all goes well. Hard to do more unless the Sacramento community opens early enough and does very well.

KC

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Sold 80% of position at $80.01.

Well that worked out, closed around $69 after finding support at 50dma.