10-QPeriod: Q1 FY2017

HORTON D R INC /DE/ Quarterly Report for Q1 Ended Dec 31, 2016

Filed January 25, 2017For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial results for the first quarter of fiscal year 2017, ending December 31, 2016. The company demonstrated significant year-over-year growth in homebuilding revenues, up 20%, driven by a 17% increase in homes closed and a slight rise in average selling price. Net sales orders also saw a substantial 17% increase in value, indicating robust demand. The financial services segment also performed well, with revenues up 41%. Overall, DHI reported a 31% increase in net income and a 31% increase in diluted earnings per share, showcasing operational efficiency and market responsiveness. The company's strategic focus on a broad range of product offerings, from entry-level to luxury homes, coupled with its extensive geographic diversification, positions it favorably in the current housing market. DHI's strong balance sheet, ample liquidity, and controlled debt levels further underscore its financial health and ability to navigate market dynamics.

Financial Highlights

37 data points
Beta

Revenue

$2.90B

21.9% Gross Margin

Net Income

$206.90M

7.1% Net Margin

EPS (Diluted)

$0.55

Total Assets

$11.71B

Cash & Equivalents

$1.15B

Free Cash Flow

-$50.40M

Financial Statements
Beta
Revenue$2.90B
Cost of Revenue$2.27B
Gross Profit$636.30M
SG&A Expenses$325.90M
Net Income$206.90M
EPS (Basic)$0.55
EPS (Diluted)$0.55
Shares Outstanding (Basic)373.30M
Shares Outstanding (Diluted)377.40M

Key Highlights

  • 1Homebuilding revenues increased by 20% to $2.8 billion compared to the prior year period.
  • 2Homes closed increased by 17% to 9,404, with the average closing price rising by 2% to $297,500.
  • 3Net sales orders increased by 17% in value to $2.8 billion, signaling strong future sales.
  • 4The financial services segment saw a significant revenue increase of 41% to $78.1 million.
  • 5Net income rose by 31% to $206.9 million, and diluted earnings per share increased by 31% to $0.55.
  • 6Homebuilding debt to total capital improved to 28.6%, demonstrating effective leverage management.
  • 7The company maintained a solid home sales gross profit margin of 19.8%, indicating stable pricing power and cost control.

Frequently Asked Questions

D.R. Horton reported a strong first quarter of fiscal 2017, with a 31% increase in net income to $206.9 million and a 31% increase in diluted earnings per share to $0.55. This growth was driven by a significant increase in homebuilding revenues (up 20%) and a robust performance in its financial services segment (revenues up 41%).

The homebuilding segment experienced substantial growth, with revenues increasing by 20% to $2.8 billion. This was primarily due to a 17% increase in the number of homes closed and a 2% increase in the average selling price. Net sales orders also increased by 17% in value, indicating strong future demand.

D.R. Horton actively manages its inventory of owned land, lots, and homes under construction to align with market demand and optimize returns. The company controls a significant number of lots through option purchase contracts to mitigate land ownership risks. As of December 31, 2016, DHI controlled 212,600 lots and had 24,500 homes in inventory.

The company maintains a strong balance sheet with a homebuilding debt to total capital ratio of 28.6% as of December 31, 2016, which has improved over the previous year. D.R. Horton has substantial cash and cash equivalents, a significant revolving credit facility, and a mortgage repurchase facility, providing ample liquidity to fund its operations and debt obligations.