D.R. Horton Earnings Preview

On Tuesday, January 26, D.R. Horton DHI will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street expects EPS of $1.68 and sales around $5.50 billion. D.R. Horton reported a per-share profit of $1.0 when it published results during the same quarter last year. Sales in that period totaled $4.02 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Tuesday, earnings would be up 68.0%. Sales would be up 36.78% on a year-over-year basis. The company's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2020
EPS Estimate 1.76 1.27 1.12 0.92
EPS Actual 2.24 1.72 1.30 1
Revenue Estimate 5.88 B 5.11 B 4.42 B 3.77 B
Revenue Actual 6.40 B 5.39 B 4.50 B 4.02 B

Stock Performance

Shares of D.R. Horton were trading at $77.7 as of January 22. Over the last 52-week period, shares are up 31.04%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. D.R. Horton is scheduled to hold the call at 08:30:00 ET and can be accessed here.

Posted In: BZI-EPEarnings