10-QPeriod: Q3 FY2019

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2019

Filed July 31, 2019For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported a solid third quarter of fiscal year 2019, demonstrating year-over-year growth in key performance indicators. Total revenues increased by 10% to $4.9 billion, driven by a 13% increase in homes closed to 15,971 and a 6% rise in net sales orders. The company's homebuilding segment remains robust, with revenues up 10% and homes closed increasing by 13%. Financial services also saw significant growth, with revenues up 23% and pre-tax income increasing by 59%. The company maintained a strong balance sheet, with total equity growing and a healthy debt-to-total capital ratio, indicating financial stability. While home sales gross margins saw a slight decrease, the overall results reflect effective management of operations and market conditions. The company's strategic focus on broad geographic diversification, affordable product offerings, and controlled inventory levels continues to support its market leadership. DHI's proactive approach to managing its land and lot position, including growth in its Forestar segment, positions it well for continued performance in the evolving housing market.

Financial Highlights

37 data points
Beta

Revenue

$4.91B

21.9% Gross Margin

Net Income

$473.60M

9.7% Net Margin

EPS (Diluted)

$1.26

Total Assets

$15.22B

Cash & Equivalents

$885.30M

Free Cash Flow

$506.90M

Financial Statements
Beta
Revenue$4.91B
Cost of Revenue$3.83B
Gross Profit$1.07B
SG&A Expenses$480.00M
Net Income$473.60M
EPS (Basic)$1.28
EPS (Diluted)$1.26
Shares Outstanding (Basic)372.30M
Shares Outstanding (Diluted)376.90M

Key Highlights

  • 1Total revenues increased 10% year-over-year to $4.9 billion for the three months ended June 30, 2019.
  • 2Homes closed increased 13% year-over-year to 15,971 units for the three months ended June 30, 2019.
  • 3Net sales orders increased 6% in volume and 8% in value year-over-year for the three months ended June 30, 2019.
  • 4Homebuilding pre-tax income was $561.8 million for the three months ended June 30, 2019.
  • 5Financial services segment revenues increased 23% and pre-tax income increased 59% year-over-year for the three months ended June 30, 2019.
  • 6Stockholders' equity grew to $9.8 billion at June 30, 2019, compared to $9.2 billion at September 30, 2018.
  • 7The company's debt to total capital ratio remained stable at 26.4% as of June 30, 2019.

Frequently Asked Questions

For the three months ended June 30, 2019, D.R. Horton reported a 10% increase in total revenues to $4.9 billion and a slight increase in net income attributable to D.R. Horton to $474.8 million, up from $453.8 million in the prior year's comparable period. Diluted EPS also increased to $1.26 from $1.18.

The homebuilding segment saw revenues increase by 10% to $4.8 billion, driven by a 13% increase in homes closed to 15,971. However, the home sales gross margin decreased to 20.3% from 21.9% year-over-year, impacting pre-tax income, which slightly decreased to $561.8 million from $589.7 million.

D.R. Horton continues to strategically manage its land and lot inventory. As of June 30, 2019, lots controlled through purchase contracts represented 61% of the total land/lots owned and controlled, up from 57% at the end of fiscal year 2018. The company is also growing its majority-owned Forestar lot development operations to enhance its controlled finished lot pipeline.

D.R. Horton maintains a strong liquidity position with $885.3 million in total cash, cash equivalents, and restricted cash as of June 30, 2019. The company's debt-to-total capital ratio was 26.4%, indicating a healthy leverage level. They have access to a significant revolving credit facility and continue to evaluate capital market opportunities to support growth and operational needs.