Zinger Key Points
- D.R. Horton shares rise premarket after Q1 EPS of $2.61 beats $2.44 consensus; sales hit $7.6 billion.
- FY25 outlook projects $36-37.5B revenue, up to 92,000 homes closed, and increased share buybacks of $2.6-2.8 billion.
D.R. Horton, Inc. DHI shares traded higher after the company reported first-quarter results.
Sales fell 1% year-over-year to $7.61 billion, beating the consensus of $7.08 billion. EPS was $2.61, beating the consensus of $2.44.
Net sales orders fell 1% Y/Y to 17,837 homes and decreased 2% in value to $6.7 billion.
Homebuilding revenue declined 2% Y/Y to $7.2 billion. Homes closed in the quarter fell 1% Y/Y to 19,059 homes.
Sales order backlog of homes under contract as of December 31, 2024, decreased 21% to 11,003 homes and 21% in value to $4.3 billion.
D.R. Horton had 36,200 homes in inventory, of which 25,700 were unsold as of December 31, 2024.
Return on equity was 19.1% for FY24, and return on assets stood at 13.4%. Operating cash flow stood at $646.7 million in the quarter.
As of December 31, 2024, the cash balance was $3.0 billion, and the available capacity on its credit facilities was $3.5 billion, for a total liquidity of $6.5 billion.
D.R. Horton repurchased 6.8 million shares for $1.1 billion during the quarter. The company’s remaining stock repurchase authorization as of December-end was $2.5 billion.
Subsequent to year-end, the company declared the quarterly dividend of $0.40 per share, payable on February 14, to shareholders of record as of February 7, 2025.
FY25 Outlook: D.R. Horton reiterated its revenue of $36.0 billion – $37.5 billion versus the consensus of $37.16 billion.
It expects homes closed to be 90,000 homes-92,000 homes for the year. DHI projects FY25 operating cash flow to be greater than fiscal 2024
The company revised share repurchases outlook to $2.6 billion-$2.8 billion from ~$2.4 billion earlier for FY25. The company expects dividend payments of around $500 million.
David Auld, Executive Chairman, said, “Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is generally still limited, and demographics supporting housing demand remain favorable.”
“Despite continued affordability challenges and competitive market conditions, incentives such as mortgage rate buydowns have helped to address affordability and spur demand.”
Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ITB and Parnassus Income Funds Parnassus Value Select ETF PRVS.
Price Action: DHI shares are up 3.88% at $153.39 premarket at the last check Tuesday.
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