D.R. Horton Earnings Cheat Sheet: Increased Demand for New Homes

S&P 500 (NYSE:SPY) component D. R. Horton Inc. (NYSE:DHI) reported net income above Wall Street’s expectations for the second quarter. D.R. Horton Incorporated is a homebuilding company which constructs and sells homes in the United States and provides mortgage financing and title agency services to homebuyers.

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D. R. Horton Earnings Cheat Sheet for the Second Quarter

Results: Net income for the residential construction company rose to $27.8 million (9 cents/share) vs. $11.4 million (4 cents/share) in the same quarter a year earlier. A more than twofold rise from the year earlier quarter.

Revenue: Fell 19.7% to $733.1 million YoY.

Actual vs. Wall St. Expectations: DHI beat the mean analyst estimate of a loss of 5 cents/share.

Quoting Management: Donald R. Horton, Chairman of the Board, said, “Our sequential increases in net sales orders and backlog of 47% and 37%, respectively, reflect traditional seasonal demand. We increased our homes in inventory by 1,400 during the quarter to support the increased demand for new homes in the spring selling season. Our backlog of 5,281 homes at March 31st is higher than our backlog at the beginning of the fiscal year, and we expect our closings and pre-tax profitability to be higher in the second half of fiscal 2011 than in the first half. Our balance sheet remains strong with homebuilding cash and marketable securities of $1.4 billion and net homebuilding leverage of 18.7%.”

Key Stats: DHI’s profit in the latest quarter follows losses in the previous two quarters. The company reported a net loss of $20.4 million in the first quarter and a loss of $8.8 million in the fourth quarter of the last fiscal year.

Over the last five quarters, revenue has increased 2% on average year over year. The biggest increase came in the third quarter of the last fiscal year, when revenue rose 50.7% from the year earlier quarter.

Competitors to Watch: PulteGroup, Inc. (NYSE:PHM), KB Home (NYSE:KBH), Lennar Corporation (NYSE:LEN), Toll Brothers, Inc. (NYSE:TOL), The Ryland Group, Inc. (NYSE:RYL), NVR, Inc. (NYSE:NVR), M.D.C. Holdings, Inc. (NYSE:MDC), Standard Pacific Corp. (NYSE:SPF), Orleans Homebuilders (OHBIQ), and Meritage Homes Corporation (NYSE:MTH).

Today’s Performance: Shares of DHI are trading up at $12.45 per share:


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