Introduction
D.R. Horton, the Arlington, Texas-based homebuilder, has reported increased sales for the most recent quarter and has revised its fiscal-year forecast. Despite rising borrowing costs and inflationary pressures, the demand for new homes remains strong. Here are the key details:
Earnings
The company recorded a profit of $1.34 billion, or $3.90 per share, for the three months ending on June 30. This is compared to $1.65 billion, or $4.67 per share, for the same period last year. Analysts surveyed by FactSet predicted earnings of $2.83 per share, making D.R. Horton’s actual earnings surpass expectations.
Revenue
Sales experienced an almost 11% increase, reaching $9.73 billion, exceeding the $8.27 billion anticipated by analysts surveyed by FactSet.
Outlook
Considering market conditions and the company’s performance in the first three quarters of the fiscal year, D.R. Horton has raised its sales outlook for the full year. The new target is set at $34.7 billion to $35.1 billion, up from the previous guidance of $31.5 billion to $33.0 billion. Additionally, the company has also revised its guidance for homes closed and rental units closed for the fiscal year. Furthermore, D.R. Horton anticipates generating over $3 billion of cash from operations.
D.R. Horton continues to demonstrate resilience in the face of challenges posed by higher borrowing costs and inflation. With their improved sales figures and increased fiscal-year outlook, the company remains optimistic about future growth.
D.R. Horton Stock Soars Amid Strong Demand for Affordable Homes
Shares of D.R. Horton have experienced a substantial surge, jumping about 8% to reach $138.00 in premarket trading on Thursday. This impressive growth comes on the heels of an already impressive year for the stock, with a cumulative increase of over 43%. In contrast, the company faced a decline of almost 18% in 2022 due to concerns surrounding rising interest rates.
The positive news surrounding D.R. Horton has also had a favorable effect on rival homebuilder Toll Brothers, whose shares rose 1.7% during the premarket session.
Chairman Donald Horton attributes the company’s success to robust demand for affordable homes in the United States, coupled with limited supply. Despite the pressures of higher mortgage rates and inflation on Americans, D.R. Horton’s sales orders rose by an impressive 37% compared to the previous year. Horton emphasizes that the supply of both new and existing homes at affordable price points remains scarce, while the demographic factors supporting housing demand remain favorable.
Another significant highlight is D.R. Horton’s buyer cancellation rate, which indicates the proportion of gross sales orders that were canceled. The rate held steady from the fiscal second quarter at 18%, surpassing analysts’ expectations of 18.7% and improving upon the 24% reported during the same period last year.
Overall, D.R. Horton’s performance paints a promising picture for the company, as it continues to thrive amidst increased demand for affordable housing. With limited supply and favorable demographic trends driving this growth, it appears that D.R. Horton is well-positioned for ongoing success.