William Lyon Homes (WLH) continues to benefit from its presence in attractive real estate markets, posting impressive results in its third-quarter earnings.
For instance, same-store average sale prices were up 26% from a year ago and 5% sequentially.
"Higher sale prices continue to translate into higher gross margins, which expanded 580 basis points year-over-year and 370 basis points sequentially," explained William Lyon Homes CEO William Lyon.
The homebuilder generated $14.9 million in income, or 44 cents a share, delivering its seventh consecutive quarter of year-over-year growth in deliveries, orders and backlog.
Home sales revenue increased to $141.4 million for the quarter, up 84% from year earlier levels.
The increase in home sales revenue was due to a 33% increase in deliveries, coupled with a 39% increase in the average sales price of homes delivered, compared to a year earlier.
The increase in third-quarter deliveries was driven by a modest improvement in the number of homes in backlog at the beginning of the quarter compared to the year-ago period, and a backlog conversion rate of 70%.
On a same-store basis – representing projects that were open during comparable periods – the average sales priced increased from $245,200 to $309,000 year-over-year, up 26%.
New home orders rose from 279 to 312 units, rising 12% from last year. While backlog units totaled 467, a 13% increase compared to 414 units a year earlier.
William Lyon Homes posted the biggest gain in homebuilding gross margins up 145% to $33.4 million from a year earlier.
During the quarter, the homebuilder added to its strong land position with key lot acquisitions across most of its markets, particularly Northern and Southern California and Colorado.
"We have grown our total lot count by 15% over the last twelve months, with a focus on value-added development opportunities in communities where we deliver homes in 2015 and beyond," said William Lyon Homes president and chief operating officer Matthew Zaist.
He added, "In addition, we continue to focus on opening new stores, with a 44% increase in average community count, year-over-year.”
Going forward, William Lyon Homes will continue to review its operating strategy in each community to achieve the right balance between price increases and sales pace — with the goal of maintaining or increasing gross profit margins.