Despite Housing Woes, NVR Ekes Out a Profit

Home-building giant NVR posted a profit for the first three months of 2009, showing resiliency in the face of a foundering housing market.

The Reston company reported earnings of $18 million ($3.02 per share), a 59 percent decrease from 2008's first quarter, when it earned $43.5 million ($7.42). Revenue totaled $548.3 million in the first three months of 2009, a 37 percent decline from $869.9 million a year earlier.

The results are an improvement from the fourth quarter of 2008, when NVR posted a loss of $30.5 million, its first of the housing bust. Most of that stemmed from a $109.8 million write-down of the value of those land deposits. This time around, NVR had no write-downs on land deposits.

"Their performance is superior to every other home builder for several reasons," said Joseph Snider, vice president and senior credit officer for Moody's. "Number one is they are still making money whereas none of the others are making money . . . they are [also] exceptionally liquid."

NVR, the Washington area's most active home builder, has largely avoided the steep losses and bankruptcy protection filings of some of its peers by pursuing a conservative land acquisition strategy. Rather than buying property outright, it controls land with options to buy when it's ready to build.

NVR's sales remained weak, during the quarter, though, as consumer confidence fell and job losses mounted. New orders decreased 11 percent from the year-ago period, to 2,426 units., down 11 percent from a year earlier.