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D.R. Horton Profit Beats Estimates as Home Sales Climb

Monday, 23 Apr 2012 09:37 AM

D.R. Horton Inc., the largest U.S. homebuilder by volume, reported a second-quarter profit that beat analyst estimates after sales improved.

Net income was $40.6 million, or 13 cents a share, for the three months through March 31, up from $27.8 million, or 9 cents, a year earlier, the Fort Worth, Texas-based company said today in a statement. Analysts expected earnings of 3 cents a share, the average of 17 estimates in a Bloomberg survey.

The company had a profit for the fifth straight quarter as sales increased in each of its regions. U.S. new-home sales probably rose in March to an annual pace of 318,000, the median estimate of 64 economists surveyed by Bloomberg. That would be up 1.6 percent from February and 4.3 percent from a year earlier. The Commerce Department will report the data tomorrow.

“With the favorable weather this past quarter, DHI may have goosed starts of both sold and spec homes, driving revenues higher,” Stephen East, an analyst with International Strategy & Investment Group LLC in St. Charles, Missouri, wrote in an April 20 note to clients, referring to D.R. Horton by its ticker symbol. East, who rates the company a buy, projected earnings of 3 cents a share.

D.R. Horton’s homebuilding revenue for the quarter was $935.6 million, up from $733.1 million a year earlier.

Orders rose 19 percent from a year earlier to 5,899 homes, and the company’s backlog of properties under contract increased 17 percent to 6,189. The number of homes closed jumped 21 percent to 4,240.

Sales Pace Continuing

A “strong” sales pace has continued through the first half of April, Chairman Donald R. Horton said in the statement. The company predicted stronger closings and profitability in the second half of the fiscal year, as consumers traditionally buy more new homes during warmer months.

Builders broke ground on new houses at an annual pace of 462,000 last month, down from 463,000 in February and up from 418,000 in March 2011, the Commerce Department said last week.

NVR Inc., the fourth-largest U.S. homebuilder by revenue, said April 19 that its orders rose 31 percent and its backlog increased 33 percent.

D.R. Horton’s results were released before U.S. markets opened. The builder’s rose 5.2 percent to $15.38 on April 20. The shares have gained 22 percent this year, compared with a 23 percent advance for the 11-member Standard & Poor’s 1500 Homebuilding index.


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Monday, 23 Apr 2012 09:37 AM
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