MDC Holdings Earnings: Here’s Why Investors are Happy Now

MDC Holdings Inc. (NYSE:MDC) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 1.19%.

MDC Holdings Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 245.45% to $0.76 in the quarter versus EPS of $0.22 in the year-earlier quarter.

Revenue: Rose 54.94% to $400.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: MDC Holdings Inc. reported adjusted EPS income of $0.76 per share. By that measure, the company beat the mean analyst estimate of $0.54. It beat the average revenue estimate of $393.95 million.

Quoting Management: Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “I am pleased to announce a second quarter profit of $4.56 per diluted share, our sixth consecutive quarterly operating profit, with net income improving by $214.3 million over the prior year. Our favorable results were significantly impacted by a $187.6 million tax benefit related to the reversal of a portion of our deferred tax asset valuation allowance, stemming from our return to consistent profitability and an improving housing market. Additionally, our homebuilding results again improved significantly, as volume and gross margin gains drove both year-over-year and sequential improvements in our homebuilding pretax operating margin to 7.4%.”

Key Stats (on next page)…

Revenue increased 20.66% from $331.75 million in the previous quarter. EPS increased 68.89% from $0.45 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.53 to a profit $0.67. For the current year, the average estimate has moved up from a profit of $1.74 to a profit of $2.46 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)