D.R. Horton Earnings Crush Estimates; DHI Stock Pops In Buy Zone

D.R. Horton (DHI) easily beat earnings and revenue estimates for the second quarter early Thursday, while giving upbeat revenue guidance for the full year. DHI stock rose within buy range in premarket trading.

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D.R. Horton earnings are a heat check for the sector, with the housing market recovery in the spotlight.

Mortgage rates have pulled back from their October 2022 peak, providing a jolt to housing demand and sales, experts say. Homebuilder earnings are set to struggle for at least a few quarters, but housing stocks have raced ahead.

D.R. Horton Earnings

Estimates: Analysts polled by FactSet expected D.R. Horton earnings to tumble 52% vs. a year earlier to $1.93 a share. Revenue was seen falling 19% to $6.452 billion.

Results: D.R. Horton earnings decreased 32% to $2.73 per diluted share, crushing estimates. Revenue came in at $7.9 billion, almost even with a year ago and well ahead of views.

Outlook: The company guided full-year revenue of $31.5 billion-$33 billion, above FactSet consensus estimates for $28.41 billion. Ahead of Thursday’s results, analysts were expecting full-year earnings per share of $9.17, down 44%.

DHI Stock

Shares of D.R. Horton gained more than 2% to above 104 in early action on the stock market today. They fell 0.3% to 101.86 Wednesday. DHI stock is back in range from a 99.09 cup-with-handle buy point after first clearing that entry in March.

Meritage Homes (MTH) advanced 2.9% early Thursday. Shares fell 0.9% to 125.78 Wednesday. MTH stock, an IBD Leaderboard member, notched a decade high Tuesday after a sharp rally since last October.

Other homebuilder stocks — including KB Home (KBH), Lennar (LEN) and PulteGroup (PHM) — were narrowly mixed Wednesday. KBH stock, Lennar and Pulte are in buy zones.

While D.R. Horton is kicking off homebuilder earnings, Meritage and Lennar will report next week.

Housing Market Recovery

U.S. single-family housing starts increased for a second straight month in March, but single-family permits for future construction rose solidly.

Home prices rose sharply over the past two years, helping to fuel homebuilder stocks. Housing demand outpaced supply due to material and labor shortages.

“The supply of both new and existing homes at affordable price points remains limited,” company Chairman Donald Horton said in January.

He added that demographics supporting housing demand remain favorable too.

D.R. Horton engages in the construction and sale of single-family housing. It claims to be the largest homebuilder by volume in the U.S. since 2002.

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