M/I Homes earnings fell short of analyst expectations in the third quarter of 2026, with adjusted diluted earnings of $2.70 per share missing estimates by $0.60. The homebuilder’s October 21 results showed revenue declining 4.9% to $1.076 billion for the three months ended September 30, while net income fell to $66.6 million from $106.5 million a year earlier.
Key Takeaways
- Adjusted diluted earnings fell to $2.70 per share from $4.14 a year earlier.
- Deliveries and new contracts each declined 2%, while backlog sales value fell 9%.
- CEO Robert H. Schottenstein cited higher mortgage rates, weaker demand and growing economic uncertainty.
Table of Contents
- M/I Homes earnings weaken beyond the revenue decline
- Quarterly orders soften despite year-to-date growth
- Balance sheet remains a management priority
- Conclusion
M/I Homes earnings weaken beyond the revenue decline
The company’s third-quarter results announcement showed reported diluted earnings of $2.56 per share, down from $3.92 a year earlier. Adjusted earnings excluded $4.7 million in pre-tax inventory charges, equivalent to $0.14 per diluted share.
Profit declined much faster than sales. Pre-tax income fell 38% to $86.9 million, while operating income dropped to $83.3 million from $135.3 million. Gross margin was 20.9%, compared with approximately 23.9% a year earlier, and stood at 21.3% excluding inventory charges.
Lower closing volumes were only part of the revenue pressure. The average home closing price declined to $460,000 from $477,000, alongside deliveries falling to 2,241 homes from 2,296. General and administrative expenses increased to $76.6 million from $70.8 million, adding pressure as revenue contracted.
| Item | Details |
|---|---|
| Shareholders’ equity | $3.253 billion, a company record |
| Book value per common share | $129.94, versus $120.44 a year earlier |
| Cash, cash equivalents and restricted cash | $620.6 million |
| Unsecured credit facility | $900 million, with no borrowings outstanding |
| Homebuilding debt-to-capital ratio | 18%, unchanged from a year earlier |
Quarterly orders soften despite year-to-date growth
New contracts totaled 1,861 in the quarter, compared with 1,908 a year earlier. The Southern region recorded a 4% decline, while Northern contracts increased 1%. The cancellation rate remained unchanged at 12%.
That quarterly slowdown contrasted with the first nine months of 2026, when new contracts increased 5% to 6,598. Deliveries over the same nine-month period fell 4% to 6,361.
The September 30 backlog contained 2,046 homes, down 7%, with a total sales value of approximately $1.1 billion, down 9%. Its average sales price declined to $539,000 from $553,000. The smaller backlog represented fewer contracted homes awaiting delivery than a year earlier.
Balance sheet remains a management priority
Schottenstein described increasingly difficult market conditions but said the company remained confident in the housing industry’s long-term fundamentals. He pointed to low debt levels, liquidity and diverse product offerings as support for navigating the cycle.
M/I Homes repurchased $50 million of common stock during the quarter. Its financial position at September 30 included the following measures.
Conclusion
The quarter combined weaker pricing and deliveries with a sharper fall in profit, despite continued year-to-date order growth. At the time of the release, the next confirmed management discussion was the earnings call scheduled for October 21, 2026, at 10:30 a.m. Eastern Time.
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