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D.R. Horton, Inc. (DHI - Free Report) came up with yet another stellar show in the third quarter of fiscal 2018. Earnings and revenues surpassed the Zacks Consensus Estimate, courtesy of a solid housing market scenario. Shares of the homebuilder increased 3.6% in the pre-market trading session following the earnings release.
The upside was led by the company’s strength in its diverse product offerings from an array of brands and solid housing market conditions across its broad national footprint. The company remains focused to consistently grow its top line and pre-tax profits at a double-digit pace annually, while generating higher annual operating cash flows and returns.
Earnings & Revenue Discussion
The company reported earnings of %1.18 per share, surpassing the Zacks Consensus Estimate of $1.08 by 9.3%. Earnings increased 55.3% from the year-ago profit level of 76 cents.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $4.44 billion. The figure surpassed the Zacks Consensus Estimate of $4.33 billion and also increased 17.4% year over year.
Home Closings and Orders
Homebuilding revenues of $4.32 billion increased 17.4% from the prior-year quarter. Home sales increased 16.5% year over year to $4.27 billion, aided by higher home deliveries. Land/lot sales and other revenues were $59.1 million, up from $22.2 million a year ago.
Home closings increased 13% to 14,114 homes and 16% to $4.3 billion in value. The company registered growth across all regions comprising East, Midwest, Southeast, South Central, Southwest and West.
Net sales orders increased 12% to 14,650 homes on continued improvement. Orders increased across all operating regions. Value of net orders grew 13% to $4.4 billion. The cancellation rate was 21%, same as the prior-year quarter.
Quarter-end sales order backlog (under contract) increased 9.1% to 16,536 homes. Backlog value increased 7.2% to $4.98 billion.
Revenues at the Financial Services segment increased 5.7% to $97.1 million. Forestar contributed $23.6 million to quarterly revenues.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
NVR, Inc. (NVR - Free Report) reported second-quarter 2018 earnings of $49.05 per share, beating the Zacks Consensus Estimate of $46.21 by 6.2%. Earnings increased 39% from the prior-year quarter, primarily owing to a lower tax rate.
KB Home’s (KBH - Free Report) second-quarter fiscal 2018 earnings of 57 cents per share outpaced the Zacks Consensus Estimate of 49 cents by 16.3% and increased significantly by 72.7% from 33 cents recorded in the year-ago period.
Meritage Homes Corporation (MTH - Free Report) reported earnings of $1.31 per share, surpassing the Zacks Consensus Estimate of $1.10 by 19.1%. Earnings increased 34% from the year-ago profit level of 98 cents.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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D.R. Horton (DHI) Stock Gains on Q3 Earnings & Revenues Beat
D.R. Horton, Inc. (DHI - Free Report) came up with yet another stellar show in the third quarter of fiscal 2018. Earnings and revenues surpassed the Zacks Consensus Estimate, courtesy of a solid housing market scenario. Shares of the homebuilder increased 3.6% in the pre-market trading session following the earnings release.
The upside was led by the company’s strength in its diverse product offerings from an array of brands and solid housing market conditions across its broad national footprint. The company remains focused to consistently grow its top line and pre-tax profits at a double-digit pace annually, while generating higher annual operating cash flows and returns.
Earnings & Revenue Discussion
The company reported earnings of %1.18 per share, surpassing the Zacks Consensus Estimate of $1.08 by 9.3%. Earnings increased 55.3% from the year-ago profit level of 76 cents.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $4.44 billion. The figure surpassed the Zacks Consensus Estimate of $4.33 billion and also increased 17.4% year over year.
Home Closings and Orders
Homebuilding revenues of $4.32 billion increased 17.4% from the prior-year quarter. Home sales increased 16.5% year over year to $4.27 billion, aided by higher home deliveries. Land/lot sales and other revenues were $59.1 million, up from $22.2 million a year ago.
Home closings increased 13% to 14,114 homes and 16% to $4.3 billion in value. The company registered growth across all regions comprising East, Midwest, Southeast, South Central, Southwest and West.
Net sales orders increased 12% to 14,650 homes on continued improvement. Orders increased across all operating regions. Value of net orders grew 13% to $4.4 billion. The cancellation rate was 21%, same as the prior-year quarter.
Quarter-end sales order backlog (under contract) increased 9.1% to 16,536 homes. Backlog value increased 7.2% to $4.98 billion.
Revenues at the Financial Services segment increased 5.7% to $97.1 million. Forestar contributed $23.6 million to quarterly revenues.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
D.R. Horton, Inc. Price, Consensus and EPS Surprise | D.R. Horton, Inc. Quote
Margins
The company’s consolidated pre-tax profit margin expanded 210 basis points to 13.9% in the quarter.
Balance Sheet
D.R. Horton’s cash, cash equivalents and restricted cash totaled $1,178.2 million as of Jun 30, 2018 compared with $1,007.8 million on Sep 30, 2017.
Fiscal 2018 Guidance
D.R. Horton increased consolidated pre-tax profit margin guidance to the range of 12.7-12.9% from 12.1-12.3% expected earlier.
Zacks Rank
Currently, D.R. Horton carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
NVR, Inc. (NVR - Free Report) reported second-quarter 2018 earnings of $49.05 per share, beating the Zacks Consensus Estimate of $46.21 by 6.2%. Earnings increased 39% from the prior-year quarter, primarily owing to a lower tax rate.
KB Home’s (KBH - Free Report) second-quarter fiscal 2018 earnings of 57 cents per share outpaced the Zacks Consensus Estimate of 49 cents by 16.3% and increased significantly by 72.7% from 33 cents recorded in the year-ago period.
Meritage Homes Corporation (MTH - Free Report) reported earnings of $1.31 per share, surpassing the Zacks Consensus Estimate of $1.10 by 19.1%. Earnings increased 34% from the year-ago profit level of 98 cents.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>