Market Overview

Earnings Preview: Beazer Homes and DR Horton

On Monday morning, prominent homebuilders D.R. Horton (NYSE: DHI) and Beazer Homes (NYSE: BZH) are set to release their quarterly earnings results. Both stocks have been surging in 2012 as the housing market has been showing signs of resurgence. Year-to-date, D.R. Horton shares have risen more than 63 percent and Beazer Homes is up around 34 percent. With the stocks far outpacing the S&P 500, investors will want to verify that the businesses are making progress along with the housing market.

Of the two companies, D.R. Horton is far larger than Beazer Homes with a market cap of $6.58 billion. Beazer Homes' market cap is a mere $409 million. Heading into the report, Wall Street analysts have consensus earnings per share estimates for D.R. Horton of $0.28.

This represents estimated earnings growth of more than 154 percent versus the $0.11 per share the company reported in the year ago period. The high estimate on Wall Street is $0.35 with a low estimate of $0.18. Given the wide discrepancy in estimates, the stock could be quite volatile in the wake of the results.

Sales in the period are expected to be $1.35 billion, a 23.30 percent increase over the $1.10 billion that D.R. Horton reported last year. The high revenue estimate is $1.40 billion with a low estimate of $1.31 billion.

Over the last 3 months, analysts' consensus earnings estimates have fallen by a penny from $0.29 to $0.28 for the quarter. During this time, DHI shares have climbed almost 14 percent. Last week, the stock fell a little more than 2 percent versus a loss for the S&P 500 of 2.43 percent. On Friday, DHI shed 1.76 percent to close at $20.60 ahead of Monday morning's key report.

Heading into Beazer Homes' quarterly report, Wall Street analysts have consensus earnings per share estimates calling for a loss of $1.22. This is better than the $2.90 per share loss that the company reported in the year ago quarter. The high estimate for the company is a loss of $0.76 with a low estimate of $2.70. Like D.R. Horton, the wide range of expectations could trigger volatility in the stock after the numbers are released.

Sales in the quarter are expected to be up 0.10 percent to $335.11 million from hte $334.91 million the company reported last year. The high estimate is $379.40 million with a low estimate of $308.24 million.

Earnings estimates for Beazer Homes have held steady over the last 3 months. During this time, the stock has risen nearly 20 percent. Over the last week, shares are up a little less than 1 percent, but BZH recorded a better than 2 percent loss on Friday heading into Monday's key earnings report.

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