http://finance.yahoo.com/news/lgi-homes-inc-reports-first-11…
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Looks good to me. Didn’t make my $0.64 
That was based on a factor developed from the last two quarters. I also had the factor based on the average of last three quarters and that predicted $0.58. So anyway, a beat. And the number of lots increased. Years of lot inventory increased (unlike Meritage whose lot inventory decreased).
KC
I’ll be buying once the free fall stops. The number of homes closed was a known. The average price is up 7% but there was m 3% miss on revenue estimate (by analysts). So they were expecting sales price to increase 10%. Shares down 12%. !?
I think the call is in a couple of hours. Perhaps sanity will prevail after that. I’m filling out my position.
KC
Here’s the fly in the ointment. Adjusted gross margin and higher indirect costs related to expansion. However there was improved operating leverage related SG&A.
Adjusted gross margin as a percentage of home sales revenues for the first quarter of 2016 was 26.7% as compared to 27.8% for the first quarter of 2015. This decrease is primarily due to a shift in geographic mix and a combination of increased construction costs and lot costs partially offset by higher average home sales price. In addition, the Company experienced higher indirect overhead charges in the first quarter of 2016 primarily due to timing and costs related to expansion. Please see “Non-GAAP Measures” for a reconciliation of adjusted gross margin to gross margin.
Net income of $11.7 million, or $0.58 per basic share and $0.57 per diluted share, for the first quarter of 2016 increased $4.0 million, or 51.9%, from $7.7 million for the first quarter of 2015. This increase is primarily attributable to the 25.8% increase in homes closed, the increase in average home sales price, and operating leverage realized related to selling, general and administrative expenses, net of increased expenses associated with new communities.
Maybe a computer saw the revenue miss and assumed pricing pressure?
Still looks good to me. Higher construction and land costs reported by other builders. Maybe there is a concern that increased house prices will dampen demand from first time buyers.
KC
From http://discussion.fool.com/where-did-that-estimate-of-revenue-up…
I said:
According to Yahoo finance the average estimate for Q2 revenue is 167.55M. I said 38%, but that’s actually more like a 39% increase YoY. I read that this “midpoint” came from exactly 2 analysts. One estimated revenue at 176.50M (which seems silly and reminds me of your post “On the Estimates Game”) and the other estimated 158.60M, which seems in the ballpark.
You better believe I picked up some shares this morning. Delighted to say I grabbed em at 26.23!
You better believe I picked up some shares this morning. Delighted to say I grabbed em at 26.23!
I should have been buying instead of posting. I got mine at 26.94 and 26.95. You caught the (short term) bottom.
Bed time here. Will I still love those shares in the morning? Breakfast while listening to the call…
KC
I split the difference with you 2. As a full time trader I love an edge fundamentally besides my TA tools. Saul and this board give me that edge. I bought in the 26.40s and took $1.10 , 1.30, 1.50 and stopped out at.90 for this trade. When a Saul stock gets hammered I pay attention.
Thank you all for what you share.
Rob
Here’s the fly in the ointment. Adjusted gross margin and higher indirect costs related to expansion. However there was improved operating leverage related SG&A.
Hi oforfive, You always have to read the conference call. They said that the small decrease in adjusted gross margin was primarily due to a shift in geographic mix, and to a combination of increased construction costs and lot costs, partially offset by higher average home sales price. And… In addition, we experienced higher indirect overhead charges in the first quarter due to timing and costs related to expansion.
The way they set that aside, it should be clearly just for the first quarter. And, 57 cents represents earnings up 73% from 33 cents the year before. If that small decrease in gross margin held them back to a 73% gain, “How terrible!”
Saul
Finally, even with today’s drop, right now, at $28.13, they are just back to about where they closed on Friday. Big deal.
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LGI Homes Reports Q1 Earnings Beat, Revenue Misses
The homebuilder said its revenue rose to $162.5 million from $120.7 million but missed the $167.6 million consensus estimate.
Revenue rises 35% but doesn’t satisfy ARBITRARY numbers picked off the hat’s of brilliant analysts who have the power to make a stock price plunge in spite of positive REAL numbers.
Pees me off
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