Why Builder D.R. Horton Shares Are Diving Today

Builder D.R. Horton, Inc DHI reported first-quarter fiscal 2024 sales growth of 7% year-over-year to $7.73 billion, beating the consensus of $7.60 billion.

Net sales orders increased 35% to 18,069 homes and 38% Y/Y in value to $6.8 billion.

Homes closed in the quarter increased 12% Y/Y to 19,340 homes compared to 17,340 homes closed in same quarter 2023. 

EPS was $2.82 (+2% Y/Y), missing the consensus of $2.88.

DHI’s sales order backlog of homes under contract as of Dec. 31, 2023, decreased 11% to 13,965 homes and fell 12% in value to $5.4 billion.

D.R. Horton had 42,600 homes in inventory, of which 28,800 were unsold as of Dec. 31, 2023.

Return on equity or ROE was 21.8% for trailing twelve months ended Dec. 31, 2023, and homebuilding return on inventory (ROI) was 29%.

The company’s net cash used in operations for the quarter totaled $(153.4) million, compared to the operating cash flow of $829.1 million a year ago.

Consolidated cash balance was $3.3 billion, and available capacity on its credit facilities was $3.1 billion, for a total liquidity of $6.4 billion.

D.R. Horton repurchased 3.3 million shares of common stock for $398.3 million during the quarter. The company’s remaining stock repurchase authorization on Dec. 31, 2023, was $1.3 billion.

D.R. Horton declared a quarterly cash dividend of $0.30 per common share, payable on Feb. 13, 2024, to stockholders of record on Feb. 6, 2024.

Outlook: D.R. Horton updates fiscal 2024 outlook, now sees revenue of $36 billion-$37.3 billion (prior view $36 billion-$37 billion) versus the consensus of $36.64 billion.

It expects Homes closed to be 87,000 homes-90,000 homes (prior view 86,000 homes-89,000 homes).

DHI reiterated cash provided by operations guidance of greater than $3 billion and share repurchases of ~$1.5 billion.

Related: Home Run To Homewrecker – Analyst Cautious On Homebuilders, Downgrades Key Players

Price Action: DHI shares are trading lower by 8.06% at $144.99 on Tuesday.