10-QPeriod: Q2 FY2019

HORTON D R INC /DE/ Quarterly Report for Q2 Ended Mar 31, 2019

Filed April 30, 2019For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported solid financial results for the third quarter of fiscal year 2019, demonstrating growth in revenues and net income compared to the prior year. Total revenues increased to $4.13 billion, up 8.6% year-over-year, driven by an 8% increase in home sales revenue to $3.98 billion. The company successfully closed 13,480 homes, a 10% increase, with an average closing price of $295,300. Net income attributable to D.R. Horton rose slightly to $351.3 million, resulting in diluted earnings per share of $0.93, an improvement from $0.91 in the prior year period. The company continues to expand its land and lot position, with a strong focus on lots controlled through purchase contracts, indicating a strategy to manage inventory efficiently and leverage its Forestar segment. Despite a slight decrease in home sales gross margin to 19.3%, driven by rising costs, D.R. Horton maintained a healthy pre-tax income margin of 10.0% for its homebuilding segment. The financial services segment also showed resilience, with revenues and pre-tax income increasing. Overall, the company's balance sheet remains robust, with total equity growing and a well-managed debt-to-capital ratio, positioning it favorably within the homebuilding industry.

Financial Highlights

37 data points
Beta

Revenue

$4.13B

21.1% Gross Margin

Net Income

$354.40M

8.6% Net Margin

EPS (Diluted)

$0.93

Total Assets

$15.01B

Cash & Equivalents

$731.20M

Free Cash Flow

-$138.20M

Financial Statements
Beta
Revenue$4.13B
Cost of Revenue$3.26B
Gross Profit$872.00M
SG&A Expenses$444.20M
Net Income$354.40M
EPS (Basic)$0.94
EPS (Diluted)$0.93
Shares Outstanding (Basic)373.30M
Shares Outstanding (Diluted)377.70M

Key Highlights

  • 1Homebuilding revenues increased 8% to $4.0 billion.
  • 2Homes closed increased 10% to 13,480, with an average closing price of $295,300.
  • 3Net sales orders increased 6% in number and 4% in value.
  • 4Home sales gross margin decreased slightly to 19.3% from 20.8%.
  • 5Forestar segment revenues increased significantly by 189% to $65.4 million, reflecting strategic growth.
  • 6Financial services revenues increased 7% to $101.6 million, with pre-tax income up 8%.
  • 7Consolidated pre-tax income increased to $462.8 million from $444.8 million.

Frequently Asked Questions

D.R. Horton demonstrated strong performance, with consolidated revenues increasing by 8.6% to $4.13 billion and net income attributable to D.R. Horton rising slightly to $351.3 million. The homebuilding segment saw an 8% increase in revenue, supported by a 10% rise in home closings.

The homebuilding segment's revenue grew by 8% year-over-year, largely driven by a 10% increase in the number of homes closed to 13,480. Despite a slight decline in home sales gross margin to 19.3% due to increased costs, the company managed its inventory effectively, with a healthy pre-tax income margin of 10.0% for the segment.

D.R. Horton is strategically increasing its control over land and lots, particularly through purchase contracts, which now represent 62% of its total controlled land and lots. This approach, along with the growth in its Forestar segment, aims to enhance operational efficiency and optimize inventory investments.

The financial services segment performed well, with revenues up 7% and pre-tax income up 8%. The Forestar segment experienced substantial growth, with revenues soaring 189% year-over-year, indicating successful integration and expansion in lot development.