M.D.C. Holdings Third Quarter Earnings Sneak Peek

M.D.C. Holdings, Inc. (NYSE:MDC) will unveil its latest earnings on Tuesday, October 30, 2012. M.D.C. Holdings operates in the field of homebuilding and financial services. Its homebuilding operations consist of construction and sale of single-family detached homes and financial services includes mortgage loans and title agency services.

M.D.C. Holdings, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 21 cents per share, a swing from a loss of 32 cents in the year-earlier quarter. During the past three months, the average estimate has moved up from 19 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 21 cents during the last month. For the year, analysts are projecting profit of 77 cents per share, a swing from net loss of $1.27 last year.

Past Earnings Performance: Last quarter, the company beat estimates by 8 cents, coming in at net income of 17 cents a share versus the estimate of profit of 9 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, the company swung to a profit of $10.6 million (22 cents a share) from a loss of $28 million (60 cents) a year earlier, beating analyst estimates. Revenue rose 19.8% to $258.3 million from $215.7 million.

Wall St. Revenue Expectations: On average, analysts predict $339.6 million in revenue this quarter, a rise of 60.7% from the year-ago quarter. Analysts are forecasting total revenue of $1.16 billion for the year, a rise of 37.4% from last year’s revenue of $844.2 million.

Stock Price Performance: Between July 31, 2012 and October 24, 2012, the stock price rose $7.38 (23.2%), from $31.86 to $39.24. The stock price saw one of its best stretches over the last year between May 18, 2012 and May 29, 2012, when shares rose for seven straight days, increasing 16.8% (+$4.30) over that span. It saw one of its worst periods between November 16, 2011 and November 25, 2011 when shares fell for seven straight days, dropping 11.7% (-$2.21) over that span.

Key Stats:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 9.7% in the first quarter before climbing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 7.11 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 7.91 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12.6% to $240.2 million while assets rose 1.3% to $1.71 billion.

Analyst Ratings: There are mostly holds on the stock with eight of nine analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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