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D.R. Horton (DHI) Q1 Earnings & Revenues Beat, Shares Rise

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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.

D.R. Horton, Inc. Price, Consensus and EPS Surprise

D.R. Horton, Inc. Price, Consensus and EPS Surprise

D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote

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.


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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