D.R. Horton, Inc. (DHI) showed a profit of $50.5 million or 16 cents per share in the second quarter of its fiscal year, meeting the Zacks Consensus Estimate. The profit improved from a loss of $143.8 million or 45 cents per share in the second quarter of the prior fiscal year.
Homebuilding revenue in the quarter rose 51% to $1.4 billion, slightly up from the Zacks Consensus Estimate of $1.3 billion. Homes closed surged 60% to 6,805 homes from 4,240 homes in the same quarter of fiscal 2009.
Net sales orders for the quarter fell 3% to 4,921 homes (valued at $1 billion) from 5,089 homes (valued at $1.1 billion) in the prior-year quarter. The decline was attributable to difficult market conditions after the expiration of the tax credit at the end of April this year. The company’s net sales orders decreased significantly in May and improved modestly in June and July.
D.R. Horton’s cancellation rate — cancelled sales orders divided by gross sales orders — was 28% during the quarter. The sales order backlog of homes under contract as of June 30, 2010 decreased 18% to 4,430 homes (valued at $954.4 million) from 5,430 homes (valued at $1.1 billion) as of June 30, 2009.
In the first nine months of fiscal 2010, D.R. Horton’s homebuilding debt repurchases and redemptions totaled $883.6 million. Subsequent to June 30, 2010, the company has repurchased $53.3 million principal amount of its outstanding senior notes.
D.R. Horton had cash and marketable securities of $1.7 billion as of June 30, 2010, a decline from $1.9 billion as of June 30, 2009. In the first nine months of fiscal 2010, net cash provided by operating activities was $587.1 million, a bulk of which was contributed by federal income tax refunds received during the period.
D.R. Horton is the largest national builder, primarily engaged in the construction and sale of single-family houses in both entry-level and move-up markets. The company’s operations are spread over 77 metropolitan markets in 27 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the U.S. We continue to recommend the shares of the company as Zacks #3 Rank (Hold) in the short term and Neutral in the long term.
D R HORTON INC (DHI): Free Stock Analysis Report
Zacks Investment Research
