Why Builder D.R. Horton Shares Are Surging Today

Zinger Key Points
  • D.R. Horton exceeds expectations with $9.1 billion in sales, up 14% YoY.
  • Second-quarter EPS of $3.52 beats consensus; Raises FY24 revenue outlook to $36.7-$37.7 billion.

D.R. Horton, Inc. DHI shares are trading higher after the company reported better-than-expected second-quarter FY24 financial results and issued guidance above estimates.

Sales grew 14% Y/Y to $9.1 billion, beating the consensus of $8.3 billion. Net sales orders increased 14% Y/Y to 26,456 homes and 17% in value to $10.1 billion.

Homes closed in the quarter increased 15% Y/Y to 22,548 homes and 14% Y/Y in value to $8.5 billion. 

EPS was $3.52 (+29% Y/Y), beating the consensus of $3.06.

Sales order backlog of homes under contract as of March 31, 2024, decreased 7% to 17,873 homes and 5% in value to $7.0 billion.

D.R. Horton had 45,000 homes in inventory, of which 27,600 were unsold as of March 31, 2024.

Return on equity (ROE) was 22.2% for trailing twelve months ended March 31, 2024, and homebuilding return on inventory (ROI) was 29.9%.

The company's net cash used in operations for the six-months totaled $(470.1) million, compared to the operating cash flow of $1.47 billion a year ago.

Consolidated cash balance was $3.1 billion, and available capacity on its credit facilities was $2.6 billion, for a total liquidity of $5.7 billion.

D.R. Horton repurchased 2.7 million shares of common stock for $402.2 million during the quarter. The company's remaining stock repurchase authorization on March 31, 2024, was $800.5 million.

Dividend: D.R. Horton declared a quarterly cash dividend of $0.30 per common share, payable on May 9, 2024, to stockholders of record on May 2, 2024.

Outlook: D.R. Horton updates FY24 outlook for revenue to $36.7 billion to $37.7 billion (prior view $36 billion-$37.3 billion) vs. the consensus of $36.32 billion.

It now expects Homes closed to be 89,000 homes to 91,000 homes (prior view 87,000 homes-90,000 homes).

DHI reiterated cash provided by operations guidance of around $3 billion and currently expects share repurchases of ~$1.6 billion.

 Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ITB and Invesco Building & Construction ETF PKB.

Also ReadAre You A Housing Market Lock-In? High Mortgage Rates Result In ‘People Not Living In Homes They Would Prefer’

Price Action: DHI shares are up 2.65% at $149.60 on the last check Thursday.

Photo via Shutterstock

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