Why Beazer Homes Stock Dropped Today

Shares of Beazer Homes (BZH -7.88%) fell 7.9% on Friday after the home construction company announced weaker-than-expected quarterly results.

Why Beazer’s “strong” quarter just wasn’t enough

For Beazer’s fiscal first quarter ended Dec. 31, 2023, revenue declined 13.1% year over year to $386.8 million, translating to net income of just under $31 million, or $0.70 per share. Analysts, on average, were looking for earnings of $0.71 per share on revenue of $420.7 million.

Beazer Chairman and CEO Allan Merrill called the quarter “strong” despite “a backdrop of declining mortgage rates in late November and early December,” adding that net new orders grew significantly on a year-over-year basis.

Indeed, net new orders increased 70.7% year over year to 823, helped by a 50.4% increase in orders per community per month to two units, and a 13.5% increase in average community count to 137.

What’s next for Beazer Homes investors

“With a large backlog, improving cycle times, and community count growth, we’re on track to meet our growth and profitability goals for the fiscal year,” Merrill stated.

Beazer ended the calendar year with a backlog of 1,791 homes worth $932.8 million. The average selling price of Beazer’s homes in backlog declined 3.7% year over year to $520,800.

In any case, Beazer is doing well to steer the factors of its business within its control. But with its latest quarterly results arriving below Wall Street’s already low expectations, it’s hardly surprising to see the construction stock falling today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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