Builder D.R. Horton Beats On Q3 Earnings, Authorizes $4B Stock Buyback, Tightens FY24 Home Sales Forecast & More

D.R. Horton, Inc. DHI shares are trading higher after the company reported third-quarter FY24 results.

Sales grew 2% Y/Y to $10.0 billion, beating the consensus of $9.77 billion. Net sales orders increased 1% Y/Y to 23,001 homes and were flat in value at $8.7 billion.

Homes closed in the quarter increased 5% Y/Y to 24,155 homes and 6% in value to $9.2 billion.

Sales order backlog of homes under contract as of June 30, 2024, decreased 12% to 16,792 homes and 12% in value to $6.6 billion.

D.R. Horton had 42,600 homes in inventory, of which 26,200 were unsold as of June-end.

EPS was $4.10 (+5% Y/Y), beating the consensus of $3.78.

Return on equity (ROE) was 21.5% for the trailing twelve months ended June 30, 2024, and homebuilding return on inventory (ROI) was 29.5%.

The company’s net cash used in operations for the nine months totaled $228.2 million. Consolidated cash balance was $3.0 billion, and available capacity on its credit facilities was $2.8 billion, for a total liquidity of $5.8 billion.

Buyback: D.R. Horton repurchased 3.0 million shares of common stock for $441.4 million during the quarter. The company’s remaining stock repurchase authorization on June 30 was $459.7 million.

In July 2024, the Board of Directors authorized a new stock repurchase program of up to $4.0 billion, replacing the previous authorization. This new authorization has no expiration date.

Dividend: Subsequent to quarter end, D.R. Horton declared a quarterly dividend per share of $0.30, payable on August 8 to stockholders of record on August 1.

FY24 Outlook: D.R. Horton revised the outlook for revenue to $36.8 billion-$37.2 billion (from $36.7 billion to $37.7 billion) vs. the consensus of $36.972 billion.

It now expects homes closed to be 90,000 to 90,500 (prior view 89,000 to 91,000 homes).

DHI reiterated cash provided by operations guidance of around $3.0 billion and currently expects share repurchases of ~$1.8 billion.

David Auld, Executive Chairman, said, “Although inflation and mortgage interest rates remain elevated, the supply of both new and existing homes at affordable price points is still limited, and demographics supporting housing demand continue to be favorable.”

Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ITB and SMI 3Fourteen Full-Cycle Trend ETF FCTE.

Price Action: DHI shares are up 6.2% at $167.15 at the last check Thursday.

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