DR Horton Earnings Shine. The Stock Is Down, but Things Are Fine.

4 months ago 30

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Coming into Thursday, D.R. Horton shares were up astir 33% twelvemonth to date.

Daniel Acker/Bloomberg

Housing elephantine D.R. Horton reported amended than expected fiscal third-quarter numbers Thursday morning. While the results and institution outlook were positive, investors reacted with caution.

Horton (ticker: DHI) earned $3.06 a stock from $7.3 cardinal successful sales. Wall Street was looking for $2.80 successful per-share net from $7.2 cardinal successful sales. It’s the company’s 10th consecutive quarterly net beat.

“The D.R. Horton squad delivered outstanding results successful the 3rd fiscal 4th of 2021, highlighted by EPS expanding 78%,” said Donald Horton, president of the board. “These results bespeak our experienced teams and accumulation capabilities, industry-leading marketplace share, wide geographic footprint and divers merchandise offerings crossed aggregate brands.”

Shares, however, were down astir 3.8% successful Thursday’s premarket trading.

Coming into Thursday, Horton shares were up astir 33% twelvemonth to date, amended than the comparable 16% and 14% respective gains of the S&P 500 and Dow Jones Industrial Average.

The company’s beardown first-half results person been driven by an improving economy. Housing starts successful June, for instance, roseate astir 6% compared with May and astir 30% twelvemonth implicit year. The June starts fig besides exceeded economist projections.

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The institution sounds upbeat astir coming months too. “Housing marketplace conditions stay precise robust, with location purchaser request exceeding our existent capableness to present homes crossed each of our markets,” the president said. “As our apical precedence is to consistently fulfill our commitments to our homebuyers, we person slowed our location income gait to much intimately align to our existent accumulation levels, portion gathering retired the infrastructure needed to enactment a higher level of location starts.”

Horton’s existent inventory of homes is astir 47,000, up 55% from a twelvemonth ago.

With that inventory, the institution present expects to make astir $27.9 cardinal successful income for its afloat fiscal year, an summation of astir $700 cardinal from guidance fixed successful April. With 1 4th near successful the company’s fiscal year, the guidance implies much than $8 cardinal successful fourth-quarter sales, amended than the Street’s existent projection of $7.7 billion.

The Thursday greeting banal weakness tin astir apt beryllium champion described arsenic bull marketplace action. When things are bully investors’ playbooks usually archer them to “sell the quality and bargain the dips.”

Write to Al Root astatine allen.root@dowjones.com

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