DR Horton Inc. (DHI) reported net income of $27.8 million or 9 cents per share in the second quarter of fiscal 2011 compared with a net income of $11.4 million or 4 cents per share during the same quarter in last fiscal.
However, on excluding a non-cash tax benefit of $59.2 million and charges of $14.3 million for inventory impairments and land option cost write-offs, DR Horton realized a net loss of $17.1 million or 5 cents per share at par with the Zacks Consensus Estimate.
Homebuilding revenues dropped 18% to $733.1 million driven by depressed home sales and land sales performances. Revenues failed to reach the Zacks Consensus Estimate of $742 million.
Home sales fell 18% to $733 million driven by a 17.5% decrease in home closings, from 4,260 homes a year ago to 3,516 homes in the second quarter of fiscal 2011. On the other hand, land sales contributed only $0.1 million to revenues compared with $2 million in the prior year.
Net sales orders for the second quarter totaled 4,943 homes, valued at $1.0 billion, compared with 6,438 homes, valued at $1.3 billion in the same quarter of fiscal 2010. Order cancellation rate rose to 25% from 21% in the previous year. The quarter-end backlog reduced 16.4% to 5,281 homes, valued at $1.1 billion, from the prior-year backlog of 6,314 homes, valued at $1.3 billion.
DR Horton’s homebuilding cash and marketable securities totaled $1.40 billion and homebuilding notes payable totaled $1.96 billion as of March 31, 2011 as compared with $1.86 billion of cash and marketable securities and $2.55 billion of notes payable as of March 31, 2010.
The company also repurchased $64.7 million (principal amount) of its outstanding senior notes during the second quarter for a total purchase price of $67.2 million excluding interests.
Subsequent to the quarter-end, DR Horton repaid at maturity the remaining $70.1 million (principal amount) of its 6% senior notes. Alongside, it also redeemed the remaining $112.3 million (principal amount) of its 5.375% senior notes due 2012, which will result in a loss of $6.3 million in the third quarter on early retirement of debt.
The company’s Board of Directors also announced a quarterly cash dividend of $0.0375 per share on May 24, 2011 to shareholders of record at the close of business on May 12, 2011.
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