We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2023 (ended Jun 30, 2023) results, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. Shares of the company gained more than 4.5% in the pre-market trading session on Jul 20.
On a year-over-year basis, although earnings declined, revenues increased. Notably, the company highlighted that the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable. This tailwind has helped this Arlington, TX-based homebuilder to witness net sales order growth of 37% year over year in the fiscal third quarter.
Earnings, Revenue & Margin Discussion
DHI reported adjusted earnings of $3.90 per share for the fiscal third quarter, beating the Zacks Consensus Estimate of $2.82 by 1.1% but decreasing 16.5% from the year-ago figure of $4.67.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $9.73 billion, up 11% year over year. The reported figure topped the consensus mark of $8.35 billion by 16.4%.
The consolidated pre-tax margin contracted to 18.3% in the quarter from 24.8% a year ago.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
Homebuilding revenues of $8.73 billion grew 5% from the prior-year quarter. Our estimate was $7.81 billion. Home sales were $8.7 billion, up from $8.3 billion reported a year ago. Home closings were up 8% from the prior-year quarter to 22,985 homes. Our estimate for the metric was 20,539 units.
Net sales orders were up 37% year over year to 22,879 homes. The value of net orders also improved 26% year over year to $8.7 billion. The cancelation rate (on gross sales orders) was 18%, down from 24% a year ago.
Order backlog of homes at the end of the fiscal third quarter was 19,186 homes, down 34% year over year. Moreover, the value of the backlog was down 38% from the prior year to $7.4 billion.
Financial Services’ revenues decreased 10.1% from the year-ago level to $228.5 million.
Forestar contributed $368.9 million to total quarterly revenues with 3,812 lots sold, reflecting an increase from $308.5 million in revenues generated a year ago on 3,473 lots sold.
The Rental business generated revenues of $667.1 million for the quarter, up from $109.7 million a year ago.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.41 billion as of Jun 30, 2023, compared with $3.07 billion at the end of Mar 31, 2023. It had $2 billion of available capacity on the revolving credit facility at the end of 2022. Total homebuilding liquidity was $4.6 billion.
At the end of June 2023, DHI had 43,800 homes in inventory, of which 25,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 555,100 lots at the fiscal third-quarter end. Of these, 25% were owned and 75% were controlled through land and lot purchase contracts.
At the end of Jun 30, 2023, homebuilding debt totaled $2.7 billion, with a homebuilding debt to total capital of 11.1%. The homebuilding debt includes $400 million of senior notes, which will mature in August 2023. The trailing 12-month return on equity was 24.3%.
D.R. Horton repurchased 3.1 million shares of common stock for $342.9 million during the fiscal third quarter. The company’s remaining stock repurchase authorization as of Jun 30, 2023, totaled $657.1 million.
The company paid dividends of $85.2 million during the quarter and announced a quarterly cash dividend of 25 cents per share, payable on Aug 14, 2023, to stockholders of record on Aug 7.
Raised Fiscal 2023 Views
DHI now expects consolidated revenues to be in the range of $34.7-$35.1 billion, up from the prior expectation of $31.5-$33 billion. DHI reported $33.5 billion of revenues in fiscal 2022. Homes closed are anticipated within 82,800-83,300 units versus 77,000-80,000 units expected earlier.
For the Rental business, the company expects homes closed within 6,500-7,000 units versus prior guidance of 4,000-5,000 units. Fiscal 2023 cash flow from homebuilding operations on a consolidated basis is expected to be more than $3 billion.
Zacks Rank
Currently, D.R. Horton carries a Zacks Rank #3 (Hold).
Peer Release
KB Home (KBH - Free Report) reported better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023). Both earnings and revenues beat the Zacks Consensus Estimate. The company’s earnings and revenues surpassed the consensus mark in two consecutive quarters.
KBH’s net orders grew 1% in the quarter to 3,936 units from the prior year. The value of net orders, however, was down 11% from the year-ago quarter to $1.9 billion due to lower ASP. Sequentially, net orders grew 84% in units and 90% in value, respectively.
Key Picks
Some better-ranked stocks in the same space are as follows:
Beazer Homes USA (BZH - Free Report) : This Atlanta, GA-based homebuilder designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings and Choice Plans names. An ample supply of lots and a more efficient and less leveraged balance sheet will drive growth.
BZH — a Zacks Rank #1 (Strong Buy) stock — has gained 131% this year. The Zacks Consensus Estimate for its fiscal 2023 and 2024 earnings has been upwardly revised by 11% and 4.2%, respectively, over the past 60 days. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 25.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lennar (LEN - Free Report) : Based in Miami, FL, Lennar is engaged in homebuilding and financial services in the United States. The company is benefiting from digital marketing initiatives and a dynamic pricing model. Also, land-lighter strategy and effective cost-control measures are added positives.
LEN — a Zacks Rank #1 stock — has gained 39.9% this year. Earnings estimates for fiscal 2023 have increased to $12.65 per share from $9.76 per share over the past 60 days. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 18.4%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
D.R. Horton (DHI) Tops Q3 Earnings & Revenues, Ups 2023 View
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2023 (ended Jun 30, 2023) results, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. Shares of the company gained more than 4.5% in the pre-market trading session on Jul 20.
On a year-over-year basis, although earnings declined, revenues increased. Notably, the company highlighted that the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable. This tailwind has helped this Arlington, TX-based homebuilder to witness net sales order growth of 37% year over year in the fiscal third quarter.
Earnings, Revenue & Margin Discussion
DHI reported adjusted earnings of $3.90 per share for the fiscal third quarter, beating the Zacks Consensus Estimate of $2.82 by 1.1% but decreasing 16.5% from the year-ago figure of $4.67.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $9.73 billion, up 11% year over year. The reported figure topped the consensus mark of $8.35 billion by 16.4%.
The consolidated pre-tax margin contracted to 18.3% in the quarter from 24.8% a year ago.
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 $8.73 billion grew 5% from the prior-year quarter. Our estimate was $7.81 billion. Home sales were $8.7 billion, up from $8.3 billion reported a year ago. Home closings were up 8% from the prior-year quarter to 22,985 homes. Our estimate for the metric was 20,539 units.
Net sales orders were up 37% year over year to 22,879 homes. The value of net orders also improved 26% year over year to $8.7 billion. The cancelation rate (on gross sales orders) was 18%, down from 24% a year ago.
Order backlog of homes at the end of the fiscal third quarter was 19,186 homes, down 34% year over year. Moreover, the value of the backlog was down 38% from the prior year to $7.4 billion.
Financial Services’ revenues decreased 10.1% from the year-ago level to $228.5 million.
Forestar contributed $368.9 million to total quarterly revenues with 3,812 lots sold, reflecting an increase from $308.5 million in revenues generated a year ago on 3,473 lots sold.
The Rental business generated revenues of $667.1 million for the quarter, up from $109.7 million a year ago.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.41 billion as of Jun 30, 2023, compared with $3.07 billion at the end of Mar 31, 2023. It had $2 billion of available capacity on the revolving credit facility at the end of 2022. Total homebuilding liquidity was $4.6 billion.
At the end of June 2023, DHI had 43,800 homes in inventory, of which 25,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 555,100 lots at the fiscal third-quarter end. Of these, 25% were owned and 75% were controlled through land and lot purchase contracts.
At the end of Jun 30, 2023, homebuilding debt totaled $2.7 billion, with a homebuilding debt to total capital of 11.1%. The homebuilding debt includes $400 million of senior notes, which will mature in August 2023. The trailing 12-month return on equity was 24.3%.
D.R. Horton repurchased 3.1 million shares of common stock for $342.9 million during the fiscal third quarter. The company’s remaining stock repurchase authorization as of Jun 30, 2023, totaled $657.1 million.
The company paid dividends of $85.2 million during the quarter and announced a quarterly cash dividend of 25 cents per share, payable on Aug 14, 2023, to stockholders of record on Aug 7.
Raised Fiscal 2023 Views
DHI now expects consolidated revenues to be in the range of $34.7-$35.1 billion, up from the prior expectation of $31.5-$33 billion. DHI reported $33.5 billion of revenues in fiscal 2022. Homes closed are anticipated within 82,800-83,300 units versus 77,000-80,000 units expected earlier.
For the Rental business, the company expects homes closed within 6,500-7,000 units versus prior guidance of 4,000-5,000 units. Fiscal 2023 cash flow from homebuilding operations on a consolidated basis is expected to be more than $3 billion.
Zacks Rank
Currently, D.R. Horton carries a Zacks Rank #3 (Hold).
Peer Release
KB Home (KBH - Free Report) reported better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023). Both earnings and revenues beat the Zacks Consensus Estimate. The company’s earnings and revenues surpassed the consensus mark in two consecutive quarters.
KBH’s net orders grew 1% in the quarter to 3,936 units from the prior year. The value of net orders, however, was down 11% from the year-ago quarter to $1.9 billion due to lower ASP. Sequentially, net orders grew 84% in units and 90% in value, respectively.
Key Picks
Some better-ranked stocks in the same space are as follows:
Beazer Homes USA (BZH - Free Report) : This Atlanta, GA-based homebuilder designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings and Choice Plans names. An ample supply of lots and a more efficient and less leveraged balance sheet will drive growth.
BZH — a Zacks Rank #1 (Strong Buy) stock — has gained 131% this year. The Zacks Consensus Estimate for its fiscal 2023 and 2024 earnings has been upwardly revised by 11% and 4.2%, respectively, over the past 60 days. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 25.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lennar (LEN - Free Report) : Based in Miami, FL, Lennar is engaged in homebuilding and financial services in the United States. The company is benefiting from digital marketing initiatives and a dynamic pricing model. Also, land-lighter strategy and effective cost-control measures are added positives.
LEN — a Zacks Rank #1 stock — has gained 39.9% this year. Earnings estimates for fiscal 2023 have increased to $12.65 per share from $9.76 per share over the past 60 days. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 18.4%.