M/I Homes Inc. (NYSE:MHO) stock fell Wednesday after the homebuilder reported third-quarter 2026 earnings and revenue that missed Wall Street estimates. Higher mortgage rates, weaker housing demand and economic uncertainty weighed on results.
M/I Homes Misses Earnings and Revenue Estimates
M/I Homes reported adjusted earnings of $2.70 per share, missing the analyst estimate of $3.35.
Revenue declined 5% year over year to $1.076 billion, falling short of Wall Street’s estimate of $1.109 billion.
Reported earnings fell to $2.56 per share from $3.92 a year earlier.
Profit Declines As Housing Demand Weakens
Net income dropped to $66.6 million from $106.5 million a year earlier. Pretax income fell to $86.9 million from $139.8 million.
The results included $4.7 million in pretax inventory charges, equivalent to 14 cents per diluted share.
Adjusted EBITDA declined to $103.4 million from $156.6 million.
Home deliveries fell 2% to 2,241, while new contracts declined 2% to 1,861.
The average home closing price dropped to $460,000 from $477,000.
Backlog units decreased 7% to 2,046, while backlog sales value fell 9% to $1.1 billion. The cancellation rate remained unchanged at 12%.
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Southern Markets Drag Down Sales
M/I Homes reported mixed performance across its regional markets.
In the Northern region, new contracts increased 1% to 746, while home deliveries rose 1% to 949.
However, Southern region new contracts declined 4% to 1,115, while deliveries fell 5% to 1,292.
Despite the quarterly slowdown, total new contracts increased 5% to 6,598 during the first nine months of 2026.
Homebuilding revenue declined to $1.043 billion from $1.097 billion.
Financial services revenue fell to $32.7 million from $34.6 million, while pretax income in the segment declined to $13.4 million from $16.6 million.
The company’s gross margin stood at 20.9%, or 21.3% excluding inventory charges.
Strong Balance Sheet Offers Financial Flexibility
M/I Homes ended the quarter with $620.6 million in cash, cash equivalents and restricted cash. Total debt stood at $927.7 million.
Shareholders’ equity reached a record $3.3 billion, while book value per share climbed to a record $129.94.
The company’s homebuilding debt-to-capital ratio remained at 18%.
M/I Homes repurchased $50 million of its shares during the quarter. It also reported no outstanding borrowings under its $900 million unsecured credit facility.
CEO Robert Schottenstein warned of “increasingly difficult market conditions,” citing higher mortgage rates, weaker homebuyer demand and growing economic uncertainty as key challenges facing the housing industry.
However, he said the company remains confident in the industry’s long-term fundamentals.
MHO Price Action: M/I Homes shares were down 4.55% at $118.41 at the time of publication on Wednesday. The stock is near its 52-week low of $116.78, according to Benzinga Pro data.
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