D. R. Horton Earnings: Higher-Than-Expected Net Income PLEASES Investors

S&P 500 (NYSE:SPY) component D. R. Horton Inc. (NYSE:DHI) reported net income above Wall Street’s expectations for the third quarter. D.R. Horton is a homebuilding company that constructs and sells homes in the United States and provides mortgage financing and title agency services to homebuyers.

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D. R. Horton Inc. Earnings Cheat Sheet

Results: Net income for D. R. Horton Inc. rose to $787.8 million ($2.22 per share) vs. $28.7 million (9 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year-earlier quarter.

Revenue: Rose 14.4% to $1.12 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: D. R. Horton Inc. beat the mean analyst estimate of 20 cents per share. It fell short of the average revenue estimate of $1.19 billion.

Quoting Management: Donald R. Horton, Chairman of the Board, said, “Our homebuilding and financial services operations delivered another quarter of strong results highlighted by $72 million in pre-tax income. All of our homebuilding regions were profitable in the third quarter, and each region reported increases in sales, backlog, revenue and pre-tax income compared to last year. Our net sales orders improved 25%, while active selling communities decreased 5% from a year ago. Our lots controlled under option increased 41%, positioning us to grow our community count in fiscal 2013. With 7,311 homes in backlog at June 30th and continued year-over-year improvement in sales through the first part of July, we expect increased profitability in our fiscal fourth quarter. We will continue to utilize our strong balance sheet and liquidity to profitably grow our business into fiscal 2013.”

Key Stats:

The company has now beaten analyst estimates for three quarters in a row. It beat the mark by 9 cents in the second quarter and by 4 cents in the first quarter.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to 23 cents per share from 21 cents. For the fiscal year, the average estimate has moved up from 52 cents a share to 69 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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