D.R. Horton posts slowest
order growth in three quarters
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[July 26, 2017]
(Reuters) - No.1 U.S. homebuilder
D.R. Horton Inc posted a quarterly profit that scraped past analysts'
estimates, and the company reported its slowest growth in orders in
three quarters.
The company's shares were down 2.7 percent in light premarket trading on
Wednesday.
Orders, an indicator of future revenue for homebuilders, rose 11.3
percent to 13,040 homes in the third quarter ended June 30. Order rose
13.8 percent in the second quarter and 14.6 percent in the first
quarter.
The homebuilder, which mainly sells single-family homes, said it sold
12,497 homes in the quarter, compared with 10,739 a year earlier.
D.R. Horton posted a "very in-line quarter", MKM Partners analyst Megan
McGrath wrote in a note.
McGrath, however, said the company's pending deal to buy a 75 percent
stake in real estate developer Forestar Group could provide "some
valuation and sentiment support".
Fort Worth, Texas-based D.R. Horton said it expects the deal to close in
the first quarter of its 2018 fiscal year.
An improving job market continues to support demand for housing in the
United States. But the industry has been facing labor shortage, which
has squeezed the supply of homes.
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A house built by the D.R. Horton company is seen for sale in Arvada,
Colorado January 24, 2017. REUTERS/Rick Wilking/File Photo
Housing starts rose a better-than-expected 8.3 percent in June, ending three
straight months of declines.
Smaller rival PulteGroup Inc reported a higher-than-expected quarterly profit on
Tuesday, but lowered its full-year gross margin forecast partly due to higher
lumber prices following wildfires in Canada.
D.R. Horton's net income rose to $289 million, or 76 cents per share, in the
quarter, from $249.8 million, or 66 cents per share, a year earlier.
Analysts on average had expected a profit of 75 cents per share, according to
Thomson Reuters I/B/E/S.
Home sales revenue rose 17.4 percent to $3.66 billion.
The company's total revenue, which includes land and lot sales and sales from
its financial services business and other items, was $3.78 billion, beating the
average estimate of $3.72 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Anil D'Silva and
Saumyadeb Chakrabarty)
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