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D.R. Horton's (DHI) Q3 Earnings & Revenues Top Estimates

Zacks Equity Research

D.R. Horton, Inc. DHI reported better-than-expected results in third-quarter fiscal 2019, thanks to the key spring selling season, its industry-leading market share, broad geographic footprint and affordable product offerings across multiple brands.

Earnings came in at $1.26 per share in the quarter, surpassing the Zacks Consensus Estimate of $1.06 by 18.9%. The reported figure also increased 7% from the year-ago profit level of $1.18.

Revenue Discussion

Total revenues (Homebuilding, Forestar and Financial Services) came in at $4.91 billion, up 10.6% year over year. The reported figure also topped the consensus mark of $4.51 billion.
 
Home Closings and Orders

Homebuilding revenues of $4.76 billion increased 10% from the prior-year quarter. Home sales also increased 11% year over year to $4.73 billion, aided by higher home deliveries. However, land/lot sales and other revenues were $27.5 million, decreasing from $59.1 million a year ago.

Home closings increased 13% to 15,971 homes and 11% from the prior-year quarter to $4.73 billion in value. It recorded growth across all regions comprising East, Midwest, Southeast, Southwest, West and South Central. Meanwhile, average home price dropped 2% from the prior-year quarter to $296,450.

Net sales orders increased 6.4% year over year to 15,588 homes, with improvement in East, Midwest, Southeast and West, except South Central and Southwest. Value of net orders improved 7.8% year over year to $4.71 billion. The cancellation rate was 20%, lower than 21% in the prior-year quarter.

Quarter-end sales order backlog (under contract) decreased marginally by 0.2% from the prior-year quarter to 16,507 homes. Backlog value also declined 0.2% from the year-ago quarter to $4.97 billion.

Revenues from the Financial Services segment increased 23.2% from the year-ago level to $119.6 million. Forestar contributed $88.2 million to its quarterly revenues, reflecting an improvement from $23.6 million a year ago.

Margins

The company’s consolidated pre-tax margin contracted 110 basis points to 12.8% in the quarter from 13.9% a year ago.

Balance Sheet

D.R. Horton’s cash, cash equivalents and restricted cash totaled $885.3 million as of Jun 30, 2019 compared with $1,506 million on Sep 30, 2018.

Zacks Rank

Currently, D.R. Horton carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Peer Releases

PulteGroup Inc.’s PHM second-quarter 2019 earnings and revenues surpassed the respective Zacks Consensus Estimate. Both earnings and revenues, however, decreased 3.4% from the year-ago level.

NVR, Inc. NVR reported second-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate. Also, the reported figure increased 8.2% from the prior-year quarter. Total revenues (Homebuilding & Mortgage Banking fees combined) were $1.8 billion in the quarter, up 1% year over year on higher deliveries and prices.

Lennar Corporation LEN reported better-than-expected results in second-quarter fiscal 2019 (ended May 31, 2019), after missing estimates in the preceding quarter. Earnings and revenues increased on a year-over-year basis during the quarter.

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D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
NVR, Inc. (NVR) : Free Stock Analysis Report
 
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Lennar Corporation (LEN) : Free Stock Analysis Report
 
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