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D.R. Horton, Inc.’s (DHI - Free Report) shares climbed 3.1% after it reported fourth-quarter fiscal 2020 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder also increased quarterly cash dividend by 14% to 20 cents per share.
Chairman Donald R. Horton said, "With 38,000 homes in inventory, an ample supply of lots and continued strong sales trends in October, we are well-positioned for another great year in fiscal 2021."
Earnings & Revenue Discussion
D.R. Horton reported quarterly adjusted earnings of $2.24 per share, which surpassed the Zacks Consensus Estimate of $1.76 by 27.3% and increased 65.9% from the year-ago period.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $6.4 billion, up 27% year over year. The reported figure beat the consensus mark by 8.8%.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
Homebuilding revenues of $6.16 billion increased 27.2% from the prior-year quarter. Home sales also increased 27.7% year over year to $6.13 billion, aided by higher home deliveries. However, land/lot sales and other revenues were $33.4 million, down from $42.8 million a year ago.
Home closings increased 26% from the prior-year quarter to 20,248 homes and 28% in value to $6.1 billion. It recorded growth across all regions, namely East, Midwest, Southeast, and South Central, Southwest and West.
Quarterly net sales orders increased 81% year over year to 23,726 homes. It registered growth in all geographic regions served. Value of net orders also improved 84% year over year to $7.3 billion. The cancellation rate was 19%, lower than 23% a year ago.
Order backlog of homes at quarter-end was 26,683 homes, up 96% year over year. The value of backlog was also up 98% from the prior year to $8.2 billion.
Revenues from the Financial Services segment increased 63.4% from the year-ago level to $220.9 million.
Forestar contributed $347.6 million to its total quarterly revenues, reflecting a notable improvement from $236.3 million a year ago.
Margins
The company’s consolidated pre-tax margin expanded 440 basis points to 16.5%.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.02 billion as of Sep 30, 2020 compared with $1.49 billion at fiscal 2019-end.
At fiscal 2020-end, it had $2.6 billion of unrestricted homebuilding cash and $1.8 billion of available capacity. Total homebuilding liquidity was $4.4 billion.
As of Sep 30, 2020, homebuilding debt totaled $2.5 billion, with $400 million of senior note maturities in fiscal 2021.
As of Sep 30, 2020, its homebuilding debt to total capital was 17.5%. The trailing 12-month return on equity was 22.1%.
D.R. Horton repurchased 7 million shares of common stock for $360.4 million during fiscal 2020. The company’s remaining stock repurchase authorization — which has no expiration date — as of Sep 30, 2020 was $535.3 million.
Fiscal 2020 Highlights
Total revenues increased 15% from a year ago to $20.3 billion. Earnings grew 47% year over year to $6.41 per share. Homes closed rose 15% to 65,388 homes and 16% in value to $19.6 billion.
Fiscal 2021 Guidance
Total revenues are expected in the range of $24-25 billion. Homes closed are expected within 77,000-80,000 units. Income tax rate is anticipated to be 24%.
Zacks Rank
Currently, D.R. Horton carries a Zacks Rank #3 (Hold).
PulteGroup Inc. (PHM - Free Report) — a Zacks Rank #1 stock — reported third-quarter 2020 results, wherein earnings and revenues handily surpassed the Zacks Consensus Estimate, buoyed by higher demand.
NVR, Inc. (NVR - Free Report) — also a Zacks Rank #1 stock — reported better-than-expected results for third-quarter 2020, wherein earnings and revenues topped the Zacks Consensus Estimate. The quarterly results benefited from solid housing market fundamentals in the United States, courtesy of low mortgage rates.
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D.R. Horton (DHI) Shares Rise on Q4 Earnings & Revenue Beat
D.R. Horton, Inc.’s (DHI - Free Report) shares climbed 3.1% after it reported fourth-quarter fiscal 2020 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder also increased quarterly cash dividend by 14% to 20 cents per share.
Chairman Donald R. Horton said, "With 38,000 homes in inventory, an ample supply of lots and continued strong sales trends in October, we are well-positioned for another great year in fiscal 2021."
Earnings & Revenue Discussion
D.R. Horton reported quarterly adjusted earnings of $2.24 per share, which surpassed the Zacks Consensus Estimate of $1.76 by 27.3% and increased 65.9% from the year-ago period.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $6.4 billion, up 27% year over year. The reported figure beat the consensus mark by 8.8%.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote
Home Closings and Orders
Homebuilding revenues of $6.16 billion increased 27.2% from the prior-year quarter. Home sales also increased 27.7% year over year to $6.13 billion, aided by higher home deliveries. However, land/lot sales and other revenues were $33.4 million, down from $42.8 million a year ago.
Home closings increased 26% from the prior-year quarter to 20,248 homes and 28% in value to $6.1 billion. It recorded growth across all regions, namely East, Midwest, Southeast, and South Central, Southwest and West.
Quarterly net sales orders increased 81% year over year to 23,726 homes. It registered growth in all geographic regions served. Value of net orders also improved 84% year over year to $7.3 billion. The cancellation rate was 19%, lower than 23% a year ago.
Order backlog of homes at quarter-end was 26,683 homes, up 96% year over year. The value of backlog was also up 98% from the prior year to $8.2 billion.
Revenues from the Financial Services segment increased 63.4% from the year-ago level to $220.9 million.
Forestar contributed $347.6 million to its total quarterly revenues, reflecting a notable improvement from $236.3 million a year ago.
Margins
The company’s consolidated pre-tax margin expanded 440 basis points to 16.5%.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.02 billion as of Sep 30, 2020 compared with $1.49 billion at fiscal 2019-end.
At fiscal 2020-end, it had $2.6 billion of unrestricted homebuilding cash and $1.8 billion of available capacity. Total homebuilding liquidity was $4.4 billion.
As of Sep 30, 2020, homebuilding debt totaled $2.5 billion, with $400 million of senior note maturities in fiscal 2021.
As of Sep 30, 2020, its homebuilding debt to total capital was 17.5%. The trailing 12-month return on equity was 22.1%.
D.R. Horton repurchased 7 million shares of common stock for $360.4 million during fiscal 2020. The company’s remaining stock repurchase authorization — which has no expiration date — as of Sep 30, 2020 was $535.3 million.
Fiscal 2020 Highlights
Total revenues increased 15% from a year ago to $20.3 billion. Earnings grew 47% year over year to $6.41 per share. Homes closed rose 15% to 65,388 homes and 16% in value to $19.6 billion.
Fiscal 2021 Guidance
Total revenues are expected in the range of $24-25 billion. Homes closed are expected within 77,000-80,000 units. Income tax rate is anticipated to be 24%.
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.
Peer Releases
PulteGroup Inc. (PHM - Free Report) — a Zacks Rank #1 stock — reported third-quarter 2020 results, wherein earnings and revenues handily surpassed the Zacks Consensus Estimate, buoyed by higher demand.
NVR, Inc. (NVR - Free Report) — also a Zacks Rank #1 stock — reported better-than-expected results for third-quarter 2020, wherein earnings and revenues topped the Zacks Consensus Estimate. The quarterly results benefited from solid housing market fundamentals in the United States, courtesy of low mortgage rates.
KB Home (KBH - Free Report) — a Zacks Rank #3 company — reported third-quarter fiscal 2020 (ended Aug 31, 2020) results, wherein both earnings and revenues topped the Zacks Consensus Estimate on solid housing gross margin.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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