Summary
D.R. Horton, Inc. (DHI) reported a return to profitability for the nine months ended June 30, 2010, with net income of $253.9 million, a significant improvement from a net loss of $314.9 million in the prior year period. This turnaround was driven by a substantial increase in home closings and revenues, up 40% and 31% respectively, coupled with improved home sales gross margins. The company benefited from a more favorable housing market, including increased affordability, lower mortgage rates, and government stimulus programs like the homebuyer tax credit, although demand weakened considerably after the credit's expiration. The company also experienced a significant decrease in inventory impairments and land option cost write-offs, falling to $33.9 million from $215.2 million year-over-year, reflecting a stabilization and improvement in market conditions. The homebuilding segment reported pre-tax income of $84.6 million, a dramatic recovery from a pre-tax loss of $315.1 million. The financial services segment also contributed positively, shifting from a pre-tax loss to an income of $16.6 million. Despite these positive trends, the company faces ongoing uncertainty due to the weak economy, potential interest rate hikes, and tightening credit markets.
Financial Highlights
33 data points| Revenue | $1.41B |
| Gross Profit | $206.80M |
| Interest Expense | $19.60M |
| Net Income | $50.50M |
| EPS (Basic) | $0.16 |
| EPS (Diluted) | $0.16 |
| Shares Outstanding (Basic) | 318.20M |
| Shares Outstanding (Diluted) | 319.10M |
Key Highlights
- 1Returned to profitability with $253.9 million in net income for the nine months ended June 30, 2010, a stark contrast to a $314.9 million loss in the prior year.
- 2Homebuilding revenues increased by 31% year-over-year to $3.4 billion, driven by a 40% increase in homes closed.
- 3Home sales gross margins improved significantly, increasing by 400 basis points to 17.4% for the nine-month period.
- 4Inventory impairments and land option cost write-offs decreased substantially to $33.9 million from $215.2 million year-over-year.
- 5The company maintained a strong liquidity position with $1.7 billion in homebuilding cash and marketable securities as of June 30, 2010.
- 6The financial services segment turned profitable, reporting $16.6 million in pre-tax income compared to a $12.6 million loss in the prior year.
- 7Despite recent demand softening after the homebuyer tax credit expiration, the company ended the period with a strong cash balance and reduced debt levels.