Century Communities, Inc. CCS is set to report its third-quarter 2024 results on Oct. 23 after market close.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 7.7% and increased 65.6% year over year. Net sales missed the consensus mark by 0.4% but increased 23.1% from the prior-year quarter’s level.

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CCS’ bottom line topped the consensus mark in each of the trailing four quarters, with an average surprise of 35.6%.

Trend in Estimate Revision for CCS

The Zacks Consensus Estimate for Century Communities’ third-quarter earnings has decreased to $2.55 per share from $2.62 in the past 60 days. The estimated figure indicates a 1.2% decline from the year-ago quarter earnings of $2.58 per share.

Century Communities, Inc. Price and EPS Surprise

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The consensus mark for total revenues is pegged at $1,092 million, suggesting a 22.8% increase from the year-ago quarter’s $889.4 million.

Key Factors to Note for CCS’ Q3 Performance

Despite a volatile mortgage rate environment, Century Communities' top line is expected to have increased year over year in the third quarter, driven by strong demand for affordable new homes and higher deliveries. The company’s initiative of offering affordable homes along with several incentive offerings including lot premiums, interest rate buydowns and discounts on base home prices, is likely to have aided its performance in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter 2024 total homebuilding revenues is pegged at $1,066 million, up from $866 million reported in the year-ago period. Home deliveries in the quarter are expected to be 2,778 units, up 22.7% year over year. Also, the to-be-reported quarter’s ASP of home deliveries is expected to be up 1% to $386,000 year over year.

The company's strong relationships with third-party land developers across the Southeast, Texas and all Century Complete markets have likely supported its land-light strategy, which focuses on acquiring finished lots. Also, its focus on building homes on a spec basis is likely to have bode well. This initiative of the company helps in direct cost control, sparks the availability of quick move-ins and assures buyers of financing certainty.

The company has been benefiting from strong demand for new homes during the first half of 2024. The limited availability of existing homes has been boosting demand for new homes in the market. Given the improving trend, the third-quarter 2024 consensus mark for net new home contracts is pegged at 2,615 units, up 21.7% from 2,149 units reported in the year-ago period. The backlog is anticipated to decrease to 1,578 units from 1,887 units reported in the year-ago period.

From the margin perspective, high costs associated with land and labor are expected to have weighed on margins to some extent. The company expects to see some land inflation in the third and fourth quarters. However, its cost-controlling initiatives, including the reduction in direct construction costs, are likely to have offset these headwinds in the to-be-reported quarter.