D.R. Horton Sales Rise 21%, Guides Weaker Quarter On Cooling Demand

Scott Peters
21 Jul, 2022
New York City

D.R. Horton, the home builder, said sales and earnings rose in the June quarter but estimates lower sales as housing demand began to cool in June and cancellation rates surged. 

D.R. Horton said June quarter sales increased 21% to $8.8 billion and net income surged 48% to $1.6 billion or $4.67 a share from a year ago. 

Net sales orders for the fiscal third quarter ended June decreased 7% to 16,693 homes and increased 8% in value to $6.9 billion compared to 17,952 homes and $6.4 billion in the same quarter of the prior year.

Horton's cancellation rate, cancelled sales orders divided by gross sales orders, for the fiscal third quarter rose to 24% compared to 17% in the prior year's quarter. 

Homes closed in the quarter fell 1% to 21,308 homes compared to 21,588 a year ago. 

Order backlog of homes under contract at the end of June fell 9% to 29,244 homes and increased 8% in value to $11.9 billion compared to 32,209 homes and $11.0 billion a year ago. 

 

Home Inventory and Land Bank 

At the end of the quarter, the company had 56,400 homes in inventory, of which 27,200 were unsold and 1,400 of the unsold homes were completed.

D R Horton's homebuilding land and lot portfolio totaled 598,200 lots at the end of the quarter, of which 22% were owned and 78% were controlled through land and lot purchase contracts.

At the end of the June quarter, total value of home inventories increased to $21.7 billion from $16.5 billion a year ago. 

 

Stock Repurchase 

The home builder repurchased 4.7 million shares of common stock for $310.0 million during the fiscal third quarter totaling 10.5 million shares repurchased for $854.2 million during the nine months ended in June. 

About $690.0 million are still available for the stock repurchase at the end of June. 

 

Guidance & Outlook 

The home builder lowered its full-year outlook on moderating demand to a range between $33.8 billion to $34.6 billion and complete between 83,000 and 85,000 homes. 

The company had previously guided annual revenues to fall between $35.3 billion to $36.1 billion and complete between 88,000 and 90,000 homes. 

D.R. Horton declined 3.8% to $75.83 and the stock has lost 27.96% in the year so far.  

 

Company 

D.R. Horton, Inc. is the largest homebuilder by volume in the United States since 2002. 

Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 105 markets in 33 states across the United States and closed 81,469 homes in the twelve-month period ended June 30, 2022.