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D.R. Horton Stock Rises on Q1 Earnings & Revenue Beat
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D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2025 (ended Dec. 31, 2024) results, with earnings and revenues beating Zacks Consensus Estimate but decreasing on a year-over-year basis. Shares of this Arlington, TX-based homebuilder gained more than 6% following the earnings release on Jan. 21.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Despite rising home inventories, the supply of affordable homes remains constrained, while favorable demographics continue to drive housing demand. To address affordability challenges and stimulate sales, the company leveraged incentives such as mortgage rate buydowns. Additionally, D.R. Horton focused on offering smaller, affordable floor plans to align with the needs of cost-conscious homebuyers.
The company’s strong liquidity, low leverage, and national scale provided significant operational and financial flexibility. Its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positioned D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
DHI reported adjusted earnings of $2.61 per share in the fiscal first quarter, which beat the Zacks Consensus Estimate of $2.40 by 8.8% but declined 7.4% from the year-ago figure of $2.82.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $7.6 billion, down 1.5% year over year. The reported figure, however, came above the analysts’ expectation of $7.13 billion.
The consolidated pre-tax profit margin was 14.6% in the quarter under review, down from 16.1% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $7.17 billion decreased 1.8% from the prior-year quarter. Home sales were $7.15 billion (ahead of our projection of $6.67 billion), down 1.8% from the year-ago period. Home closings were down 1% from the prior-year quarter to 19,059 homes.
Net sales orders were down 1% year over year to 17,837 homes (down from our projection of 18,629 units). The value of net orders decreased 2% year over year to $6.7 billion from $6.8 billion. The cancelation rate (on gross sales orders) was 18%, an improvement from 19% a year ago.
Order backlog of homes at the end of the fiscal first quarter was 11,003 homes, down 21% year over year. Moreover, the value of the backlog was down 21% from the prior-year period to $4.3 billion.
Financial Services’ revenues decreased 5.3% from the year-ago level to $182.3 million (down from our expectation of $197.3 million).
Forestar contributed $250.4 million (down from our projection of $315.1 million) to total quarterly revenues with 2,333 lots sold, indicating a decline from $305.9 million in revenues generated a year ago on 3,150 lots sold.
The Rental business generated revenues of $217.8 million for the quarter (we had projected $184.5 million), up from $195.3 million a year ago.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.07 billion as of Dec. 31, 2024, compared with $4.54 billion at the end of fiscal 2024. It had $3 billion of available capacity on the revolving credit facility on Dec. 31, 2024. Total liquidity was $6.5 billion.
At the end of December 2024, DHI had 36,200 homes in inventory, of which 25,700 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 639,800 lots at the end of the fiscal first quarter. Of these, 24% were owned and 76% were controlled through land and lot purchase contracts.
At the end of the fiscal first quarter, debt totaled $5.1 billion, with a debt to total capital of 17%. The trailing 12-month return on equity was 19.1%.
D.R. Horton repurchased 6.8 million shares of common stock for $1.1 billion in the fiscal first quarter. As of Dec. 31, 2024, the company's remaining stock repurchase authorization was $2.5 billion.
DHI’s Fiscal 2025 Guidance
DHI expects consolidated revenues in the range of $36-$37.5 billion compared with $36.8 billion in fiscal 2023. Homes closed are anticipated to be within 90,000-92,000 units. The income tax rate is expected to be 24%.
DHI’s Zacks Rank
Currently, D.R. Horton carries a Zacks Rank #4 (Sell).
Lennar Corporation (LEN - Free Report) reported tepid fourth-quarter fiscal 2024 results, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
Lennar’s quarterly performance was directly hit by a lag in the home sales pace due to a high mortgage rate scenario and low average selling price (ASP). Due to the affordability issue, the new orders during the quarter also showcased a downward trend.
KB Home (KBH - Free Report) reported impressive fiscal fourth-quarter 2024 results, wherein both revenues and earnings surpassed expectations. On a year-over-year basis, both metrics increased, highlighting its resilience in a fluctuating housing market.
KB Home’s results underscore the effectiveness of KB Home's strategy, driven by faster build times and a strong appetite for homeownership despite mortgage rate pressures. While challenges remain, its strong order book and expanded community count suggest a solid growth trajectory for 2025.
Acuity Brands, Inc. (AYI - Free Report) reported mixed results in the first quarter of fiscal 2025 (ended Nov. 30, 2024). Earnings exceeded the Zacks Consensus Estimate, but net sales were below the same. Earnings beat the consensus mark for the 19th consecutive quarter. Acuity Brands stock rose 3.2% yesterday during the trading session.
For fiscal 2025, Acuity Brands expects net sales between $4.3 billion and $4.5 billion (indicating growth from $3.84 billion reported in fiscal 2024), with adjusted EPS in the range of $16.50-$18.00 (depicting growth from $15.56 reported in fiscal 2024).
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D.R. Horton Stock Rises on Q1 Earnings & Revenue Beat
D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2025 (ended Dec. 31, 2024) results, with earnings and revenues beating Zacks Consensus Estimate but decreasing on a year-over-year basis. Shares of this Arlington, TX-based homebuilder gained more than 6% following the earnings release on Jan. 21.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Despite rising home inventories, the supply of affordable homes remains constrained, while favorable demographics continue to drive housing demand. To address affordability challenges and stimulate sales, the company leveraged incentives such as mortgage rate buydowns. Additionally, D.R. Horton focused on offering smaller, affordable floor plans to align with the needs of cost-conscious homebuyers.
The company’s strong liquidity, low leverage, and national scale provided significant operational and financial flexibility. Its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positioned D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote
Earnings, Revenues & Margin Discussion
DHI reported adjusted earnings of $2.61 per share in the fiscal first quarter, which beat the Zacks Consensus Estimate of $2.40 by 8.8% but declined 7.4% from the year-ago figure of $2.82.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $7.6 billion, down 1.5% year over year. The reported figure, however, came above the analysts’ expectation of $7.13 billion.
The consolidated pre-tax profit margin was 14.6% in the quarter under review, down from 16.1% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $7.17 billion decreased 1.8% from the prior-year quarter. Home sales were $7.15 billion (ahead of our projection of $6.67 billion), down 1.8% from the year-ago period. Home closings were down 1% from the prior-year quarter to 19,059 homes.
Net sales orders were down 1% year over year to 17,837 homes (down from our projection of 18,629 units). The value of net orders decreased 2% year over year to $6.7 billion from $6.8 billion. The cancelation rate (on gross sales orders) was 18%, an improvement from 19% a year ago.
Order backlog of homes at the end of the fiscal first quarter was 11,003 homes, down 21% year over year. Moreover, the value of the backlog was down 21% from the prior-year period to $4.3 billion.
Financial Services’ revenues decreased 5.3% from the year-ago level to $182.3 million (down from our expectation of $197.3 million).
Forestar contributed $250.4 million (down from our projection of $315.1 million) to total quarterly revenues with 2,333 lots sold, indicating a decline from $305.9 million in revenues generated a year ago on 3,150 lots sold.
The Rental business generated revenues of $217.8 million for the quarter (we had projected $184.5 million), up from $195.3 million a year ago.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.07 billion as of Dec. 31, 2024, compared with $4.54 billion at the end of fiscal 2024. It had $3 billion of available capacity on the revolving credit facility on Dec. 31, 2024. Total liquidity was $6.5 billion.
At the end of December 2024, DHI had 36,200 homes in inventory, of which 25,700 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 639,800 lots at the end of the fiscal first quarter. Of these, 24% were owned and 76% were controlled through land and lot purchase contracts.
At the end of the fiscal first quarter, debt totaled $5.1 billion, with a debt to total capital of 17%. The trailing 12-month return on equity was 19.1%.
D.R. Horton repurchased 6.8 million shares of common stock for $1.1 billion in the fiscal first quarter. As of Dec. 31, 2024, the company's remaining stock repurchase authorization was $2.5 billion.
DHI’s Fiscal 2025 Guidance
DHI expects consolidated revenues in the range of $36-$37.5 billion compared with $36.8 billion in fiscal 2023. Homes closed are anticipated to be within 90,000-92,000 units. The income tax rate is expected to be 24%.
DHI’s 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.
Recent Releases From the Construction Sector
Lennar Corporation (LEN - Free Report) reported tepid fourth-quarter fiscal 2024 results, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
Lennar’s quarterly performance was directly hit by a lag in the home sales pace due to a high mortgage rate scenario and low average selling price (ASP). Due to the affordability issue, the new orders during the quarter also showcased a downward trend.
KB Home (KBH - Free Report) reported impressive fiscal fourth-quarter 2024 results, wherein both revenues and earnings surpassed expectations. On a year-over-year basis, both metrics increased, highlighting its resilience in a fluctuating housing market.
KB Home’s results underscore the effectiveness of KB Home's strategy, driven by faster build times and a strong appetite for homeownership despite mortgage rate pressures. While challenges remain, its strong order book and expanded community count suggest a solid growth trajectory for 2025.
Acuity Brands, Inc. (AYI - Free Report) reported mixed results in the first quarter of fiscal 2025 (ended Nov. 30, 2024). Earnings exceeded the Zacks Consensus Estimate, but net sales were below the same. Earnings beat the consensus mark for the 19th consecutive quarter. Acuity Brands stock rose 3.2% yesterday during the trading session.
For fiscal 2025, Acuity Brands expects net sales between $4.3 billion and $4.5 billion (indicating growth from $3.84 billion reported in fiscal 2024), with adjusted EPS in the range of $16.50-$18.00 (depicting growth from $15.56 reported in fiscal 2024).