D.R. Horton’s Q1 Revenue Exceeds Estimates, but Margins Take a Hit
D.R. Horton reported a 6% increase in revenue for the quarter, reaching $7.73 billion, surpassing the estimated $7.6 billion. The company also displayed positive growth in other key metrics. The number of homes closed rose by 12% to 19,340, with an 8% increase in value to $7.3 billion. Net sales orders experienced a significant jump of 38% to $6.8 billion, indicating a strong demand. However, the backlog decreased by 12% due to a surplus in home construction.
The company’s profit margins were negatively impacted during the quarter, mainly due to the rising costs of labor and materials. As a result, operating income slightly decreased from $1.27 billion to $1.25 billion. Despite this, earnings per share showed improvement due to a decline in shares outstanding, rising from $2.76 to $2.82.
D.R. Horton demonstrated its commitment to returning capital to shareholders by repurchasing approximately $400 million worth of stock during the quarter, through both dividends and share buybacks.
Positive Outlook and Continued Demand for D.R. Horton
Chairman Donald R. Horton expressed confidence in the company’s ability to adapt to changing market conditions. He highlighted the affordable product offerings and flexible lot supply as key strengths that position them well for the future. The company’s focus is on maximizing returns and capital efficiency in each community by turning its inventory.
Looking ahead, D.R. Horton modestly increased its revenue guidance for the year, projecting $36 billion to $37.3 billion, up from the previous range of $36 billion to $37 billion. However, this suggests a continued slowdown in revenue growth, with an anticipated increase of just 3%.
Despite the stock’s return to its average valuation, the estimated shortage of 4 million homes in the United States should contribute to sustained demand for D.R. Horton’s housing offerings.