M/I Homes Stock Gains On Q2 Earnings Beat, Improved Margins

M/I Homes Inc MHO reported second-quarter revenue growth of 35% year-over-year to $961 million, beating the consensus of $853.82 million.
Revenue from Housing $927.51 million (+33.5% Y/Y), Land $4.9 million (+998% Y/Y) and Financial services $28.64 million (+50.3% Y/Y).
EPS of $3.58 topped the consensus of $2.48.
The gross margin expanded by 320 basis points to 25.1%, and the overhead expense ratio improved by 110 basis points to 10.4%.
New contracts were 2,267, and Homes delivered increased 23% Y/Y to 2,258.
Backlog units as of June 30, 2021, increased 49% to 5,488 homes, with an average sales price of $454,000. Homes in backlog at June 30, 2021, had a total sales value of $2.5 billion, up 71% from a year ago.
The company's cancellation rate was 7% in the quarter compared to 14% in 2Q20.
The operating income increased by 91% Y/Y to $141.71 million, and the margin expanded by around 430 basis points to 14.7%.
M/I Homes generated cash from operating activities of $98.63 million, compared to $107.5 million a year ago.
Adjusted EBITDA increased by 80.9% Y/Y to $156.46 million, and the margin expanded by 420 basis points to 16.3%.
Homebuilding debt to capital was 31% as of June 30, 2021, compared to 37% as of June 30, 2020.
The company approved a $100 million share repurchase authorization, replacing its existing $50 million share repurchase authorization.
Price action: MHO shares are trading higher by 3.85% at $60.79 on the last check Wednesday.

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