NVR misses third-quarter profit estimates on higher lot costs

(Reuters) – U.S. homebuilder NVR (NYSE:NVR) Inc missed Wall Street estimates for third-quarter earnings per share on Tuesday as higher lot costs and closing costs assistance weighed on profit margins.

While demand remains strong, with more skittish buyers returning to the housing market after some respite in the popular 30-year fixed mortgage rate, large homebuilders have kept their prices relatively flat due to still persistent affordability issues.

Meanwhile land and developed lot costs have seen inflationary gains, adding more pressure on margins.

NVR’s gross profit margins declined to 23.4%, from 24.3% last year.

Home deliveries in the third quarter ended Sept. 30 rose by 5% to 5,908 units.

Consolidated revenues rose 6% from a year earlier to $2.73 billion, above analysts’ estimates of $2.66 billion, according to data compiled by LSEG.

However, NVR’s third-quarter earnings per share of $130.50 came in slightly below analysts’ average estimate of $131 per share, as per data compiled by LSEG, due to higher costs and a higher effective tax rate.

Shares of the company fell about 2.7% in morning trade.