2024

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<p class="has-drop-cap">In the fourth quarter of fiscal 2024, D.R. Horton, Inc. (NYSE: DHI), <a href="https://investor.drhorton.com/news-and-events/press-releases/2024/10-29-2024-103109072" target="_blank" aria-label="reported (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">reported</a> a net income of $3.92 per diluted share, amounting to $1.3 billion. This represents a decrease from the $4.45 per diluted share and $1.5 billion in net income recorded in the same quarter of the previous fiscal year.</p>
<p>Despite this decline, the company closed 23,647 homes, generating home sales revenues of $8.9 billion, a 2% increase from the prior year. Consolidated revenues for the quarter totaled $10.0 billion, down 5% from $10.5 billion in the fourth quarter of fiscal 2023.</p>
<p>The company’s rental operations, however, faced a downturn with pre-tax income falling to $99.9 million from $217.2 million in the same quarter last year. Revenues from rental operations also decreased significantly to $704.8 million from $1.4 billion. On the other hand, Forestar, a majority-owned subsidiary of D.R. Horton, showed resilience with pre-tax income rising to $108.5 million from $95.4 million, despite slightly lower revenue growth.</p>
<p>Overall, D.R. Horton’s financial services segment experienced a slight uptick in revenues, reaching $222.0 million, compared to $219.5 million in the previous year’s fourth quarter. However, the pre-tax income for this segment fell to $75.9 million from $85.4 million, reflecting a tighter profit margin.</p>
<h3 id="d-r-horton-misses-on-expectations-in-fourth-quarter-fiscal-2024">D.R. Horton Misses on Expectations in Fourth Quarter Fiscal 2024</h3>
<p>D.R. Horton’s fourth-quarter performance fell short of analysts’ expectations, which had projected an EPS of $4.18 and revenues of $10.21 billion. The <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">actual EPS</a> of $3.92 and revenues of $10.0 billion highlight a gap in performance, primarily attributed to the challenging market conditions and affordability issues facing the housing market.</p>
<p>The company’s net sales orders for the quarter showed a modest increase of 1% in terms of homes, reaching 19,035, although the value of these orders decreased by 2% to $7.1 billion. This discrepancy between unit growth and order value indicates pressure on pricing, likely due to competitive market conditions and consumer expectations of lower mortgage rates in the future.</p>
<p>Despite these challenges, D.R. Horton managed to maintain its cancellation rate at 21%, consistent with the previous year. This stability suggests an underlying strength in demand, even as some potential buyers remain hesitant due to mortgage rate volatility. The company’s strategic use of incentives, such as mortgage rate buydowns, has been crucial in sustaining sales momentum.</p>
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<h3 id="dhi-sets-initial-guidance-for-fiscal-2025">DHI Sets Initial Guidance for Fiscal 2025</h3>
<p>D.R. Horton has set initial guidance for fiscal 2025, projecting consolidated revenues between $36.0 billion and $37.5 billion. The company anticipates closing between 90,000 and 92,000 homes through its homebuilding operations, reflecting confidence in its ability to navigate current market conditions.</p>
<p>The company also expects to maintain an income tax rate of approximately 24.5% and aims to achieve consolidated cash flow from operations exceeding that of fiscal 2024. With a focus on financial flexibility, D.R. Horton plans to allocate approximately $2.4 billion for share repurchases and $500 million for dividend payments, underscoring its commitment to returning value to shareholders.</p>
<p>David Auld, Executive Chairman, highlighted the company’s strategic positioning for fiscal 2025, emphasizing a focus on affordable product offerings and improved construction cycle times. With 37,400 homes in inventory and a strong liquidity position, D.R. Horton is poised to capitalize on favorable demographics and limited housing supply, particularly at affordable price points.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/d-r-horton-falls-short-of-expectations-in-fourth-quarter-of-fiscal-2024/">D.R. Horton Falls Short of Expectations in Fourth Quarter of Fiscal 2024</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

D.R. Horton Falls Short of Expectations in Fourth Quarter of Fiscal 2024

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