D.R. Horton reported its first earnings gain in five quarters early Tuesday, although the increase was less than expected by analysts. D.R. Horton stock swung more than 5% lower in early trade.
During a very tough quarter in the housing market, the Arlington, Texas-based homebuilder reported a 12% increase in the number of homes closed, to 19,340. Homebuying normally slumps during the winter holiday season, and this year's pause was aggravated by high interest rates — although rates did began to reverse during the quarter, after peaking in early November.
The value of D.R. Horton homes closed during its fiscal first quarter quarter was $7.3 billion, 8% higher than year-ago levels.
Diluted earnings came in at $2.82 per share, up from $2.76 a year ago. Analysts had forecast $2.87, according to FactSet. Horton reported revenue of $7.7 billion, just ahead of forecasts. But while earnings increased 2% and revenue rose 6%, the cost of sales jumped more than 8%, to above $5.7 billion.
Materials costs declined somewhat from inflated levels during the year, but the labor market remains tight and expensive.
For the full year, the builder raised the upper end of its guidance slightly, now between $36 billion and $37.3 billion. Consensus calls for $36.64 billion. It projects to close on between 87,000 and 90,000 homes.
D.R. Horton Stock
D.R. Horton stock ended Monday in a profit-taking zone, more than 20% above a cup-with-handle buy point following a breakout in December. Shares shed more than 5% at Tuesday's start of trade.
Other hombuilders felt at least a modest downdraft from Horton's report. Among the larger peers, Toll Brothers and Lennar each traded around 2% lower. KB Home and Meritage Homes fell nearly 3%.
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