Taylor Morrison Home Corporation Reports Quarterly Results for the Period Ended September 30, 2024

Press release · 10/26/2024 03:23
Taylor Morrison Home Corporation Reports Quarterly Results for the Period Ended September 30, 2024

Taylor Morrison Home Corporation Reports Quarterly Results for the Period Ended September 30, 2024

Taylor Morrison Home Corporation (TMHC) filed its quarterly report for the period ended September 30, 2024. The company reported net sales of $1.43 billion, a 12% increase from the same period last year. Net income was $143.1 million, or $1.38 per diluted share, compared to $123.1 million, or $1.19 per diluted share, in the same period last year. The company’s gross margin was 23.1%, an increase from 22.4% in the same period last year. TMHC’s operating expenses increased by 10% to $444.1 million, driven by higher selling, general, and administrative expenses. The company’s cash and cash equivalents decreased by $143.1 million to $444.1 million, primarily due to the payment of dividends and repurchase of common stock. As of October 23, 2024, TMHC had 103,477,894 shares of common stock outstanding.

Overview of Taylor Morrison Home Corporation’s Financial Performance

Taylor Morrison Home Corporation is a leading residential homebuilder and developer of lifestyle communities across 12 states in the United States. The company operates under various brand names, including Taylor Morrison, Darling Homes Collection by Taylor Morrison, Esplanade, and Yardly, and also has a financial services segment that provides mortgage, title, and insurance services to its customers.

Key Highlights for the Third Quarter and First Nine Months of 2024:

  • Diluted EPS increased 54% to $2.37 in Q3 2024 compared to the prior year quarter.
  • Net sales orders increased 9% to 2,830 in Q3 2024 and 13.7% to 9,627 in the first nine months of 2024 compared to the prior year periods.
  • Home closings revenue increased 25.9% to $2.0 billion in Q3 2024 and 7.0% to $5.6 billion in the first nine months of 2024 compared to the prior year periods.
  • Home closings gross margin improved to 24.8% in Q3 2024 from 23.1% in the prior year quarter, and to 24.2% in the first nine months of 2024 from 23.8% in the prior year period.
  • Financial services revenue increased 24.0% to $49.7 million in Q3 2024 and 24.3% to $145.5 million in the first nine months of 2024 compared to the prior year periods.
  • The company repurchased $61 million of its common stock in Q3 2024 and $258 million year-to-date.
  • Total liquidity was $1.2 billion as of September 30, 2024, with no senior notes maturing until 2027.

Revenue and Profit Trends:

Taylor Morrison’s revenue and profitability have shown strong growth in the third quarter and first nine months of 2024 compared to the prior year periods. The increase in home closings revenue was driven by a 28.6% and 12.3% increase in the number of homes closed in Q3 2024 and the first nine months of 2024, respectively. The company also saw improvements in home closings gross margin, which increased due to favorable product mix, lower incentives and discounts, and the absence of impairment charges that impacted the prior year.

The financial services segment also contributed to the company’s overall revenue and profit growth, with a 24.0% and 24.3% increase in financial services revenue in Q3 2024 and the first nine months of 2024, respectively, driven by higher mortgage origination volumes.

Strengths and Weaknesses:

Strengths:

  • Diversified geographic footprint across 12 states, with a presence in high-growth markets
  • Strong brand recognition and reputation for quality homes
  • Vertically integrated financial services segment providing mortgage, title, and insurance services
  • Disciplined land acquisition and development strategy, with 58% of lots controlled off-balance sheet
  • Healthy liquidity position and no near-term debt maturities

Weaknesses:

  • Exposure to cyclical housing market and macroeconomic conditions
  • Potential for rising construction costs and labor shortages to impact margins
  • Reliance on external factors such as mortgage rates and consumer confidence to drive sales

Outlook and Future Prospects:

The company’s strong performance in the third quarter and first nine months of 2024, coupled with its diversified geographic footprint, vertically integrated financial services segment, and disciplined capital management, position it well to navigate any potential market challenges. However, the company remains cautious about the potential impact of macroeconomic factors, such as interest rates and inflation, on the housing market and consumer demand. The company’s focus on maintaining a healthy balance sheet and liquidity position should help it weather any near-term volatility and capitalize on long-term growth opportunities in the homebuilding industry.