WASHINGTON (dpa-AFX) - Homebuilder D.R. Horton, Inc. (DHI) sold more homes in the second quarter to see its profit climb 46 percent than last year. Quarterly earnings per share and top line significantly surpassed Wall Street estimates. The company projects stronger closings and profitability in the second half, consistent with traditional seasonal trends.
It also expects to be out of its three-year cumulative loss position before the end of the fiscal year, provided the current business trends continue.
Chairman Donald Horton said, 'Our homebuilding and financial services segments delivered strong operating results in our second quarter, and our strong sales pace has continued through the first half of April.'
Late last month, the company's peer KB Home (KBH) reported a narrower loss for the first quarter, reflecting higher home deliveries and selling prices.
DR Horton's second-quarter net income increased 46 percent to $40.6 million or $0.13 per share, while analysts polled by Thomson Reuters were expecting earnings of just $0.04 per share. Analysts' estimates typically exclude special items.
Homebuilding revenues climbed 28 percent to $935.6 million as the company sold 27 percent more homes. Revenues from land/lot sales also surged. Financial Services revenues climbed 42.2 percent to $25.6 million. Wall Street analysts were looking for total revenues of $853.38 million for the quarter.
Homes closed in the quarter increased 21 percent to 4,240 units. Cancellation rate, i.e., cancelled sales orders divided by gross sales orders was 22 percent.
Net sales orders for the quarter increased 19 percent to 5,899 homes and the value of net sales orders grew 28 percent to $1.3 billion.
As of March 31, DR Horton's sales order backlog of homes under contract increased 17 percent year-over-year to 6,189 homes and the value of the backlog climbed 25 percent to $1.4 billion.
DR Horton said it ended the quarter with $961.3 million of homebuilding unrestricted cash and marketable securities, even after increasing homes in inventory and investing in land and lots.
Further, the company has declared a quarterly cash dividend of $0.0375 per share, payable on May 22 to stockholders of record on May 8.
In a statement, DR Horton said it may be able to significantly reduce the valuation allowance for its deferred tax asset at some point in the next few quarters if its business, the homebuilding industry and economic conditions remain stable.
In pre-market activity, D.R. Horton shares are currently trading at $15.45, up $0.07 or 0.46 percent.
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