DR Horton, one of the largest home builders in America, has reported a significant decline in profits for the fiscal first quarter. This downturn reflects ongoing challenges in the housing market, including weak consumer confidence and rising affordability issues. While their profits fell, the company managed to surpass certain construction and revenue targets.
Financial Performance Overview
For the three months ending December 31, DR Horton recorded a net income of $594.8 million. This figure represents a 30% decrease compared to the same period the previous year. Diluted earnings per share (EPS) also fell by 22%, settling at $2.03.
Revenue and Home Closures
The company’s revenue decreased to $6.89 billion, down from $7.61 billion a year earlier. Additionally, the number of homes closed dropped from 19,059 to 17,818. Despite these declines, DR Horton outperformed market expectations. Analysts had predicted EPS of $1.93 and revenue of $6.59 billion.
- Net Income: $594.8 million (down 30%)
- EPS: $2.03 (down 22%)
- Revenue: $6.89 billion (down from $7.61 billion)
- Homes Closed: 17,818 (down from 19,059)
Company Insights
David Auld, the executive chair, stated that the quarterly results were solid, noting the company exceeded its guidance for closings and revenue. DR Horton returned $801.2 million to shareholders through dividends and share repurchases during the quarter.
Future Outlook
Looking forward, Auld indicated that while sales incentives may remain high, their extent will depend on market conditions and mortgage rates. He emphasized DR Horton’s robust financial position, stating, “Our strong liquidity, low leverage, experienced operators, and national scale provide us with significant financial and operational flexibility.”
The future of the housing market remains uncertain, but DR Horton is positioned with affordable product offerings and a flexible lot supply, aiming to meet demand effectively.
On the trading front, DR Horton shares saw a 2.2% increase, reaching $159.40 in pre-market trading on Tuesday.
