10-QPeriod: Q1 FY2022

HORTON D R INC /DE/ Quarterly Report for Q1 Ended Dec 31, 2021

Filed February 2, 2022For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial performance for the quarter ended December 31, 2021, demonstrating significant growth in revenues and profitability compared to the prior year. The company benefited from robust demand in the housing market, driven by low interest rates and limited housing supply, which led to a substantial increase in average selling prices and home sales gross margins. Despite challenges in the supply chain and labor market that have lengthened construction cycles, DHI strategically managed its sales pace to align with production, resulting in a controlled decrease in home closings but a notable increase in revenue and order backlog value. Key financial highlights include a 19% year-over-year increase in consolidated revenues to $7.1 billion and a 45% surge in consolidated pre-tax income to $1.5 billion. The homebuilding segment, DHI's core business, saw a 17% rise in revenues and a significant improvement in gross profit margins. The company also reported a strong return on equity of 32.4% for the trailing twelve months. DHI's strategic focus on diverse markets and affordable housing options, coupled with a strong balance sheet and liquidity position, positions it well to navigate market dynamics and capitalize on ongoing demand.

Financial Highlights

38 data points
Beta

Revenue

$7.05B

30.4% Gross Margin

Net Income

$1.15B

16.2% Net Margin

EPS (Diluted)

$3.17

Total Assets

$25.00B

Cash & Equivalents

$2.46B

Free Cash Flow

-$205.00M

Financial Statements
Beta
Revenue$7.05B
Cost of Revenue$4.91B
Gross Profit$2.15B
SG&A Expenses$665.90M
Net Income$1.15B
EPS (Basic)$3.21
EPS (Diluted)$3.17
Shares Outstanding (Basic)356.10M
Shares Outstanding (Diluted)360.10M

Key Highlights

  • 1Consolidated revenues increased by 19% to $7.1 billion for the three months ended December 31, 2021, compared to $5.9 billion in the prior year period.
  • 2Consolidated pre-tax income increased by 45% to $1.5 billion, with a pre-tax operating margin of 21.2%, up from 17.4% in the prior year.
  • 3Homebuilding revenues grew by 17% to $6.7 billion, driven by a 19% increase in average closing price to $361,800, despite a 2% decrease in homes closed.
  • 4Home sales gross margin improved significantly to 27.4% from 24.1% in the prior year, reflecting strong pricing power.
  • 5Net sales orders increased by 5% in volume and 29% in value to $8.3 billion, indicating robust future demand.
  • 6The company maintained a strong balance sheet with a debt-to-total capital ratio of 25.1% at December 31, 2021, demonstrating financial flexibility.
  • 7DHI reported a substantial increase in diluted earnings per share to $3.17, up from $2.14 in the prior year period.

Frequently Asked Questions

D.R. Horton showed strong performance, with consolidated revenues increasing by 19% to $7.1 billion and consolidated pre-tax income rising by 45% to $1.5 billion. The company also saw a significant increase in diluted earnings per share to $3.17, up from $2.14 in the prior year.

The growth was primarily driven by strong demand in the housing market, leading to higher average selling prices for homes and improved home sales gross margins. Despite supply chain and labor challenges that impacted closing volumes, the company managed to increase revenue through higher prices and a strong order backlog.

D.R. Horton is strategically managing its sales pace to align with production levels, selling homes later in the construction cycle to ensure more certainty on closing dates. They are focusing on affordable product offerings and controlling inventory to optimize returns while navigating supply chain disruptions and labor market tightness.

D.R. Horton maintained a healthy financial position with a debt-to-total capital ratio of 25.1% at December 31, 2021. The company has ample liquidity and flexibility through its cash reserves, credit facilities, and access to capital markets, allowing it to fund operations, repay debt, and return capital to shareholders through dividends and stock repurchases.