D.R. Horton, Inc. (DHI - Free Report) reported impressive results for first-quarter fiscal 2022. The company’s quarterly earnings and revenues beat the respective Zacks Consensus Estimate and improved on a year-over-year basis. The upside reflects a robust housing market, significant market share gains, a vast geographic footprint and varied product offerings across multiple brands.
Shares of the company gained 3.97% in the pre-market trading session on Feb 1.
Pertaining to fiscal first-quarter results, Donald R. Horton, the chairman of the board, said, "These results reflect our experienced teams and production capabilities, industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.”
Earnings & Revenue Discussion
The company reported adjusted earnings of $3.17 per share for the quarter, surpassing the Zacks Consensus Estimate of $2.80 by 13.2% and increasing a whopping 48.1% from the year-ago period.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $7.05 billion, up 18.9% year over year. The reported figure surpassed the consensus mark of $6.75 billion.
Segment Details
Homebuilding revenues of $6.68 billion increased 16.8% from the prior-year quarter. The upside was led by higher pricing.
Home closings dropped 2% from the prior-year quarter to 18,396 homes but homes closed increased 17% in value to $6.7 billion.
Net sales orders grew 5% year over year to 21,522 homes. Also, the value of net orders advanced 29% year over year to $8.3 billion. The cancellation rate was 15%, down from 18% a year ago.
Order backlog of homes at quarter-end was 29,347 homes, up 3% year over year. Nonetheless, the value of the backlog was up 24% from the prior year to $11.1 billion.
Financial Services’ revenues decreased 2% from the year-ago level to $184.3 million.
Forestar contributed $407.6 million to total quarterly revenues, reflecting an improvement from $307.1 million a year ago.
The Rental business generated revenues of $156.5 million for the quarter.
Margins
Consolidated pre-tax margin expanded 380 basis points (bps) to 21.2% for the quarter.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.46 billion as of Dec 31, 2021 compared with $3.24 billion at fiscal 2021-end. At fiscal first quarter-end, it had $2 billion of available capacity on the revolving credit facility. Total homebuilding liquidity was $4.1 billion.
At fiscal first quarter-end, DHI had 54,800 homes in inventory, of which 25,600 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 551,400 lots at fiscal first quarter-end. Of these, 24% were owned, and 76% were controlled through land and lot purchase contracts.
At December-end, homebuilding debt totaled $3.3 billion, with homebuilding debt to total capital of 17.3%. The trailing 12-month return on equity was 32.4%.
D.R. Horton repurchased 2.7 million shares of common stock for $278.2 million during the fiscal first quarter. The company’s remaining stock repurchase authorization as of Dec 31, 2021 was $268 million.
Fiscal 2022 Guidance Updated
Total revenues are now expected in the range of $34.5-$35.5 billion versus $32.5-$33.5 billion projected earlier. Meanwhile, DHI reaffirmed expectations for other metrics. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24%. The company also expects shares outstanding to be 2% lower than fiscal 2021-end.
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
PulteGroup Inc. (PHM - Free Report) reported better-than-expected results for fourth-quarter 2021.
Both earnings and revenues for PulteGroup topped the Zacks Consensus Estimate and improved 64.1% and 36.5% year over year on the back of a solid housing market backdrop and resilient economy.
Otis Worldwide Corporation (OTIS - Free Report) reported strong earnings for fourth-quarter 2021. The company expects adjusted earnings to be $3.20-$3.30, suggesting 6-10% year-over-year growth.
Otis’ earnings surpassed the Zacks Consensus Estimate and improved 9.1% on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Meritage Homes Corporation (MTH - Free Report) reported solid fourth-quarter 2021 results. Meanwhile, 2022 earnings per share are projected in the range of $23.15-24.65.
Meritage Homes’ quarterly earnings surpassed the Zacks Consensus Estimate and improved 57% on a year-over-year basis. Revenues also improved 6.3% from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.
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D.R. Horton, Inc. (DHI - Free Report) reported impressive results for first-quarter fiscal 2022. The company’s quarterly earnings and revenues beat the respective Zacks Consensus Estimate and improved on a year-over-year basis. The upside reflects a robust housing market, significant market share gains, a vast geographic footprint and varied product offerings across multiple brands.
Shares of the company gained 3.97% in the pre-market trading session on Feb 1.
Pertaining to fiscal first-quarter results, Donald R. Horton, the chairman of the board, said, "These results reflect our experienced teams and production capabilities, industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.”
Earnings & Revenue Discussion
The company reported adjusted earnings of $3.17 per share for the quarter, surpassing the Zacks Consensus Estimate of $2.80 by 13.2% and increasing a whopping 48.1% from the year-ago period.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $7.05 billion, up 18.9% year over year. The reported figure surpassed the consensus mark of $6.75 billion.
Segment Details
Homebuilding revenues of $6.68 billion increased 16.8% from the prior-year quarter. The upside was led by higher pricing.
Home closings dropped 2% from the prior-year quarter to 18,396 homes but homes closed increased 17% in value to $6.7 billion.
Net sales orders grew 5% year over year to 21,522 homes. Also, the value of net orders advanced 29% year over year to $8.3 billion. The cancellation rate was 15%, down from 18% a year ago.
Order backlog of homes at quarter-end was 29,347 homes, up 3% year over year. Nonetheless, the value of the backlog was up 24% from the prior year to $11.1 billion.
Financial Services’ revenues decreased 2% from the year-ago level to $184.3 million.
Forestar contributed $407.6 million to total quarterly revenues, reflecting an improvement from $307.1 million a year ago.
The Rental business generated revenues of $156.5 million for the quarter.
Margins
Consolidated pre-tax margin expanded 380 basis points (bps) to 21.2% for the quarter.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.46 billion as of Dec 31, 2021 compared with $3.24 billion at fiscal 2021-end. At fiscal first quarter-end, it had $2 billion of available capacity on the revolving credit facility. Total homebuilding liquidity was $4.1 billion.
At fiscal first quarter-end, DHI had 54,800 homes in inventory, of which 25,600 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 551,400 lots at fiscal first quarter-end. Of these, 24% were owned, and 76% were controlled through land and lot purchase contracts.
At December-end, homebuilding debt totaled $3.3 billion, with homebuilding debt to total capital of 17.3%. The trailing 12-month return on equity was 32.4%.
D.R. Horton repurchased 2.7 million shares of common stock for $278.2 million during the fiscal first quarter. The company’s remaining stock repurchase authorization as of Dec 31, 2021 was $268 million.
Fiscal 2022 Guidance Updated
Total revenues are now expected in the range of $34.5-$35.5 billion versus $32.5-$33.5 billion projected earlier. Meanwhile, DHI reaffirmed expectations for other metrics. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24%. The company also expects shares outstanding to be 2% lower than fiscal 2021-end.
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
PulteGroup Inc. (PHM - Free Report) reported better-than-expected results for fourth-quarter 2021.
Both earnings and revenues for PulteGroup topped the Zacks Consensus Estimate and improved 64.1% and 36.5% year over year on the back of a solid housing market backdrop and resilient economy.
Otis Worldwide Corporation (OTIS - Free Report) reported strong earnings for fourth-quarter 2021. The company expects adjusted earnings to be $3.20-$3.30, suggesting 6-10% year-over-year growth.
Otis’ earnings surpassed the Zacks Consensus Estimate and improved 9.1% on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Meritage Homes Corporation (MTH - Free Report) reported solid fourth-quarter 2021 results. Meanwhile, 2022 earnings per share are projected in the range of $23.15-24.65.
Meritage Homes’ quarterly earnings surpassed the Zacks Consensus Estimate and improved 57% on a year-over-year basis. Revenues also improved 6.3% from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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