LGIH issued the following guidance when their Q3 2015 was reported:
- 3250-3400 homes closed in 2015
- 2015 EPS of $2.45 - $2.65/share
One might assume that the range in EPS is linked to the range in the numbers of homes closed. The first 3 quarters as reported were as follows…
- 2458 homes closed
- $1.75 EPS reported
This implies Q4 guidance is as follows…
- 792-942 homes closed
- $0.70 - $0.90 EPS
Now, LGIH reports the number of homes closed each month. October had 264 homes closed and November had 249 homes closed. Therefore, to meet the low end of guidance, LGIH will need to close 279 homes in December. To meet the high end of the guidance LGIH will need to close 429 homes.
Here are the 2015/2014 year over year comparisons by month:
2015 2014 Increase
JAN 153 119 28.6%
FEB 220 156 41.0%
MAR 298 210 41.9%
APR 267 191 39.8%
MAY 255 228 11.8%
JUN 331 243 36.2%
JUL 311 174 78.7%
AUG 320 183 74.9%
SEP 303 200 51.5%
OCT 264 241 9.5%
NOV 249 165 50.9%
DEC ??? 246
The lowest increase was 9.5%. The highest increase was 78.7%. The average increase for the first 11 months was 42.3%. So here are the numbers using the low, high, and average increase for the first 11 months of 2015 versus the first 11 months of 2014:
Low: 269 homes (to meet low guidance, LGIH needs 279 homes)
High: 439 homes (to meet high guidance, LGIH needs 429 homes)
Average: 350 homes (to meet midpoint guidance, LGIH needs 404 homes)
Using recent history as a gauge, it seems likely that LGIH will report within the guidance range.
Chris