D.R. Horton's stock rallies as limited home supply boosts profit and sales

By Tomi Kilgore

Value of new home orders jumps 17% to top $10 billion for the first time

Shares of D.R. Horton Inc. rallied Thursday, after the home builder reported fiscal second-quarter profit and revenue that rose well above expectations and raised its full-year outlook, as the continued lack of housing supply helped boost sales.

"Although inflation and mortgage interest rates remain elevated, our net sales orders increased 46% from the first quarter and 14% from the prior year quarter, as the supply of both new and existing homes at affordable price points is still limited, and demographics supporting housing demand continue to be favorable," said Chairman Donald Horton.

The stock jumped 2.8% in premarket trading, after closing Wednesday at a two-month low.

For the quarter ending March 31, net income rose to $1.17 billion, or $3.52 a share, from $942.2 million, or $2.73 a share, in the same period a year ago. That beat the FactSet consensus for earnings per share of $3.07.

Revenue grew 14.2% to $9.11 billion, well above the FactSet consensus of $8.15 billion.

The number of new homes ordered rose 14.3% to 26,456 while the value of new orders jumped 17.4% to $10.1 billion. That beat the FactSet consensus for new home orders of 26,353 and the value of new orders of $9.88 billion.

The results implied an average price for new homes ordered of $381,766, up 4.8% from last year.

Homes delivered increased 14.7% to 22,548 homes, beating the FactSet consensus of 20,310.

For the company's rental operations, single-family rental homes sold soared 53.8% to 1,109, while the value of the homes sold climbed 34.4% to $301.3 million.

For fiscal 2024, the company raised its guidance ranges for revenue to $36.7 billion to $37.7 billion from $36.0 billion to $37.3 billion and for homes closed to 89,000 homes to 91,000 homes from 87,000 homes to 90,000 homes.

The stock has lost 4.1% year to date through Wednesday, while the S&P 500 has gained 5.3%.

-Tomi Kilgore

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04-18-24 0720ET

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