10-QPeriod: Q1 FY2021

HORTON D R INC /DE/ Quarterly Report for Q1 Ended Dec 31, 2020

Filed January 27, 2021For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported a strong first quarter for fiscal year 2021, ended December 31, 2020. The company experienced significant growth in home sales, with revenues increasing by 48% year-over-year to $5.9 billion. This surge was driven by a 45% increase in homes closed and a 56% rise in net sales orders, indicating robust demand in the housing market. Profitability also saw substantial improvement, with net income attributable to D.R. Horton Inc. jumping 84% to $791.8 million, translating to a diluted EPS of $2.14. The company's strategic focus on entry-level homes and its geographically diverse operations continue to be key drivers of its success. Despite ongoing economic uncertainties related to COVID-19, DHI's strong balance sheet and liquidity position provide confidence in its ability to navigate market conditions and pursue growth opportunities.

Financial Highlights

38 data points
Beta

Revenue

$5.93B

27.0% Gross Margin

Net Income

$795.20M

13.4% Net Margin

EPS (Diluted)

$2.14

Total Assets

$19.78B

Cash & Equivalents

$2.47B

Free Cash Flow

-$268.40M

Financial Statements
Beta
Revenue$5.93B
Cost of Revenue$4.33B
Gross Profit$1.60B
SG&A Expenses$585.90M
Net Income$795.20M
EPS (Basic)$2.17
EPS (Diluted)$2.14
Shares Outstanding (Basic)364.40M
Shares Outstanding (Diluted)370.00M

Key Highlights

  • 1Homebuilding revenues surged 48% to $5.9 billion, driven by a 45% increase in homes closed and a 56% increase in net sales orders.
  • 2Net income attributable to D.R. Horton, Inc. increased 84% to $791.8 million, with diluted EPS rising to $2.14 from $1.16 in the prior year.
  • 3Home sales gross margin improved to 24.1% from 21.0% year-over-year, indicating better pricing power and cost management.
  • 4The company's sales order backlog more than doubled, increasing 107% to 28,487 homes, valued at $8.9 billion, signaling strong future revenue potential.
  • 5Financial services revenues increased by 82% to $187.2 million, with pre-tax income up significantly by 176% to $84.1 million, highlighting the strength of this segment.
  • 6D.R. Horton maintained a strong balance sheet with a debt-to-total capital ratio of 25.3% and substantial liquidity, including $2.1 billion in homebuilding cash and cash equivalents.
  • 7The company's focus on entry-level homes and its broad geographic diversification are contributing factors to its strong performance, as reflected in increased sales orders across most regions.

Frequently Asked Questions

Revenue growth was primarily driven by a significant increase in home closings, up 45% year-over-year, and a substantial rise in net sales orders, up 56%. This indicates strong demand for D.R. Horton's homes across its diverse markets. The company's strategic focus on affordable, entry-level homes also contributed to this demand, particularly in a market with limited supply.

Profitability saw significant improvement. Net income attributable to D.R. Horton, Inc. increased by 84% to $791.8 million, and diluted earnings per share rose to $2.14 from $1.16 in the prior year period. This was supported by an improved home sales gross margin of 24.1% and increased revenue volume.

The company's sales order backlog increased by 107% to 28,487 homes, valued at $8.9 billion. This substantial backlog indicates a strong pipeline of future sales and provides a positive outlook for continued revenue and earnings growth in the coming quarters, assuming current market demand persists.

The financial services segment showed robust growth, with revenues up 82% to $187.2 million and pre-tax income increasing by 176% to $84.1 million. This strong performance is largely due to increased mortgage loan originations and title services, which align with the higher volume of home sales.