In This Article:
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Earnings per Share (EPS): $2.58 per diluted share.
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Net Income: $810 million.
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Revenue: $7.7 billion.
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Pre-tax Profit Margin: 13.8%.
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Home Sales Revenue: $7.2 billion on 19,276 homes closed.
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Average Closing Price: $372,500, down 1% year over year.
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Net Sales Orders: Decreased 15% to 22,437 homes.
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Order Value: Decreased 17% to $8.4 billion.
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Gross Profit Margin on Home Sales: 21.8%.
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SG&A Expenses: Increased by 4%, representing 8.9% of revenues.
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Homes in Inventory: 36,900 homes, with 23,500 unsold.
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Rental Operations Revenue: $237 million with $23 million pretax income.
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Forestar Revenue: $351 million on 3,411 lots sold.
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Financial Services Revenue: $213 million with $73 million pretax income.
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Cash and Liquidity: $5.8 billion in consolidated liquidity.
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Debt: $6.5 billion with a leverage of 21.1%.
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Stock Repurchases: 9.7 million shares for $1.3 billion.
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Dividend: $0.40 per share, totaling $126 million.
Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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D.R. Horton Inc (NYSE:DHI) reported solid earnings of $2.58 per diluted share for the second quarter of fiscal 2025.
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The company achieved a pre-tax profit margin of 13.8% on $7.7 billion of revenues, demonstrating strong financial performance.
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D.R. Horton Inc (NYSE:DHI) maintained a low cancellation rate of 16%, indicating strong buyer commitment despite economic uncertainty.
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The company has a robust balance sheet with $5.8 billion of consolidated liquidity, providing significant financial flexibility.
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D.R. Horton Inc (NYSE:DHI) increased its share repurchase authorization to $5 billion, reflecting confidence in its financial position and commitment to returning capital to shareholders.
Negative Points
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Net sales orders and home building revenues decreased by 15% in the second quarter, reflecting challenges in the housing market.
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The average closing price for homes decreased by 1% both sequentially and year over year, indicating pricing pressures.
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Homebuilding SG&A expenses increased by 4% from the previous year, impacting overall profitability.
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The gross profit margin on home sales revenues decreased by 90 basis points sequentially due to higher incentive costs.
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D.R. Horton Inc (NYSE:DHI) expects incentive costs to increase further, potentially impacting future profit margins.
Q & A Highlights
Q: Can you discuss the shift in D.R. Horton's management approach, particularly regarding volume and share repurchases? A: Paul Romanowski, President and CEO, explained that the company is focusing on a return-based business model, balancing pace and price to drive returns and consistent operating cash flows. The emphasis is on maintaining significant scale while maximizing shareholder returns through share repurchases and dividends.