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In the last-reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 3.6% but revenues missed the same by 1.3%. Earnings and revenues of this homebuilding company grew 53% and 20.6%, respectively, from the year-ago reported figures.
Markedly, D.R. Horton reported better-than-expected earnings in the last 14 quarters.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has moved south over the past 30 days to $5.09 from $5.22 per share. The estimated figure indicates a 317.6% increase from the year-ago earnings of $3.70 per share. The consensus mark for revenues is pegged at $10.04 billion, suggesting a 23.8% year-over-year improvement.
For the fiscal fourth quarter, D.R. Horton’s Homebuilding revenues are expected to have increased from the year-ago level, given continued demand amid supply-chain challenges. Also, lower lumber prices and a higher average price of settlements are helping this one of the country’s largest homebuilders.
In addition, the company’s industry-leading market share, broad geographic footprint and affordable product offerings across multiple brands are expected to have aided revenues. DHI anticipates total revenues of $10-$10.8 billion.
The Zacks Consensus Estimate for Homebuilding revenues of $9.60 billion suggests a 25.9% increase from a year ago.
The same for Financial Services revenues of $246 million suggests a rise of 10.3% from the year-ago level of $223 million.
The Zacks Consensus Estimate for the average selling price of homes closed is pegged at $396,000, suggesting growth from the year-ago level of $346,000.
Yet, the U.S. housing market has been grappling with uncertainties arising from skyrocketing mortgage rates. This may have impacted DHI’s orders in the to-be-reported quarter.
Also, higher land, labor and material costs are expected to reflect on fiscal fourth-quarter margins to some extent. The company has been witnessing significant supply-chain disruptions, including shortages and delayed delivery of certain building materials and a tight labor market. These may have created difficulties for DHI in fulfilling customer demand, thereby affecting deliveries.
Other Projections
DHI expects fiscal fourth-quarter homes closed within 23,500-25,500. The Zacks Consensus Estimate for homes closed is pegged at 24,186 units, suggesting growth of 10.3% from the year-ago period.
DHI expects the home sales gross margin for the fiscal fourth quarter to be within 29-29.8% range. DHI anticipates homebuilding SG&A (as a percentage of revenues) for the fiscal fourth quarter to be 6.3%.
Financial services pre-tax profit margin is expected to be lower than 20% due to the timing of revenues from interest rate commitments. The income tax rate is likely to be 24% for the fiscal fourth quarter.
The consensus estimate for net sales orders is currently pegged at 13,739 units. This suggests a decrease from 15,949 units a year ago. The same for the backlog is currently pegged at 18,730 units, which suggests a decrease from 26,221 units a year ago. The consensus estimate for the value of the backlog is $7.72 billion, implying a decline from $9.46 billion in fourth-quarter fiscal 2021.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for D.R. Horton for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: DHI has an Earnings ESP of -17.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #5 (Strong Sell).
EMCOR Group, Inc. (EME - Free Report) reported third-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.
Given the solid momentum of the business activity amid a challenging macroeconomic environment, the company has lifted its revenues and earnings per share guidance for 2022.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Quanta Services Inc. (PWR - Free Report) reported impressive results for third-quarter 2022. Adjusted earnings and revenues surpassed the Zacks Consensus Estimate and increased impressively on a year-over-year basis reflecting the benefits of portfolio strategy and strategic capital deployment.
Notably, earnings beat the consensus mark in the trailing 10 quarters, whereas revenues surpassed the same in seven out of 10 consecutive quarters.
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D.R. Horton (DHI) to Post Q4 Earnings: What's in the Cards?
D.R. Horton Inc. (DHI - Free Report) is scheduled to report fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 9, before the opening bell.
In the last-reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 3.6% but revenues missed the same by 1.3%. Earnings and revenues of this homebuilding company grew 53% and 20.6%, respectively, from the year-ago reported figures.
Markedly, D.R. Horton reported better-than-expected earnings in the last 14 quarters.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has moved south over the past 30 days to $5.09 from $5.22 per share. The estimated figure indicates a 317.6% increase from the year-ago earnings of $3.70 per share. The consensus mark for revenues is pegged at $10.04 billion, suggesting a 23.8% year-over-year improvement.
D.R. Horton, Inc. Price and EPS Surprise
D.R. Horton, Inc. price-eps-surprise | D.R. Horton, Inc. Quote
Factors to Note
For the fiscal fourth quarter, D.R. Horton’s Homebuilding revenues are expected to have increased from the year-ago level, given continued demand amid supply-chain challenges. Also, lower lumber prices and a higher average price of settlements are helping this one of the country’s largest homebuilders.
In addition, the company’s industry-leading market share, broad geographic footprint and affordable product offerings across multiple brands are expected to have aided revenues. DHI anticipates total revenues of $10-$10.8 billion.
The Zacks Consensus Estimate for Homebuilding revenues of $9.60 billion suggests a 25.9% increase from a year ago.
The same for Financial Services revenues of $246 million suggests a rise of 10.3% from the year-ago level of $223 million.
The Zacks Consensus Estimate for the average selling price of homes closed is pegged at $396,000, suggesting growth from the year-ago level of $346,000.
Yet, the U.S. housing market has been grappling with uncertainties arising from skyrocketing mortgage rates. This may have impacted DHI’s orders in the to-be-reported quarter.
Also, higher land, labor and material costs are expected to reflect on fiscal fourth-quarter margins to some extent. The company has been witnessing significant supply-chain disruptions, including shortages and delayed delivery of certain building materials and a tight labor market. These may have created difficulties for DHI in fulfilling customer demand, thereby affecting deliveries.
Other Projections
DHI expects fiscal fourth-quarter homes closed within 23,500-25,500. The Zacks Consensus Estimate for homes closed is pegged at 24,186 units, suggesting growth of 10.3% from the year-ago period.
DHI expects the home sales gross margin for the fiscal fourth quarter to be within 29-29.8% range. DHI anticipates homebuilding SG&A (as a percentage of revenues) for the fiscal fourth quarter to be 6.3%.
Financial services pre-tax profit margin is expected to be lower than 20% due to the timing of revenues from interest rate commitments. The income tax rate is likely to be 24% for the fiscal fourth quarter.
The consensus estimate for net sales orders is currently pegged at 13,739 units. This suggests a decrease from 15,949 units a year ago. The same for the backlog is currently pegged at 18,730 units, which suggests a decrease from 26,221 units a year ago. The consensus estimate for the value of the backlog is $7.72 billion, implying a decline from $9.46 billion in fourth-quarter fiscal 2021.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for D.R. Horton for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: DHI has an Earnings ESP of -17.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
A Few Recent Construction Releases
EMCOR Group, Inc. (EME - Free Report) reported third-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.
Given the solid momentum of the business activity amid a challenging macroeconomic environment, the company has lifted its revenues and earnings per share guidance for 2022.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Quanta Services Inc. (PWR - Free Report) reported impressive results for third-quarter 2022. Adjusted earnings and revenues surpassed the Zacks Consensus Estimate and increased impressively on a year-over-year basis reflecting the benefits of portfolio strategy and strategic capital deployment.
Notably, earnings beat the consensus mark in the trailing 10 quarters, whereas revenues surpassed the same in seven out of 10 consecutive quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.