D.R. Horton Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component D.R. Horton, Inc. (NYSE:DHI) will unveil its latest earnings on Friday, July 27, 2012. 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.

D.R. Horton, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 20 cents per share, a rise of more than twofold from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 19 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 20 cents during the last month. Analysts are projecting profit to rise by 466.7% versus last year to 68 cents.

Past Earnings Performance: The company is looking to make a streak of three quarters of beating estimates. Last quarter, it beat expectations by reporting net income of 13 cents per share, and the previous quarter, it had profit of 9 cents.

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A Look Back: In the second quarter, profit rose 46% to $40.6 million (13 cents a share) from $27.8 million (9 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 28% to $961.2 million from $751.1 million.

Wall St. Revenue Expectations: On average, analysts predict $1.19 billion in revenue this quarter, a rise of 19.1% from the year-ago quarter. Analysts are forecasting total revenue of $4.36 billion for the year, a rise of 19.8% from last year’s revenue of $3.64 billion.

Stock Price Performance: Between April 26, 2012 and July 23, 2012, the stock price rose $2.93 (18.2%), from $16.14 to $19.07. The stock price saw one of its best stretches over the last year between June 25, 2012 and July 2, 2012, when shares rose for six straight days, increasing 13.6% (+$2.22) over that span. It saw one of its worst periods between July 28, 2011 and August 8, 2011 when shares fell for eight straight days, dropping 19.7% (-$2.34) over that span.

Key Stats:

On the top line, the company is looking to build on three-straight revenue increases heading into this earnings announcement. Revenue increased 15.8% in the fourth quarter of the last fiscal year and 15% in the first quarter before climbing again in the second quarter.

Analyst Ratings: With five analysts rating the stock as a buy, two rating it as a sell and six rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.78 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 9.7% to $5.02 billion while liabilities rose by 2.1% to $2.62 billion.

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

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