reported better than expected fiscal figures third quarter Thursday morning. While the results and the business outlook were positive, investors reacted cautiously.
Horton (ticker: DHI) earned $3.06 per share from $7.3 billion in sales. Wall Street was looking for $2.80 in earnings per share from $7.2 billion in sales. It is the company’s tenth consecutive quarterly profit.
“The DR Horton team delivered excellent results in the third fiscal quarter of 2021, culminating in a 78% increase in earnings per share,” said Donald Horton, chairman of the board. “These results reflect our experienced teams and manufacturing capabilities, industry-leading market share, broad geographic footprint and diverse multi-brand product offering.”
However, shares fell about 3.8% in Thursday’s premarket trading.
On Thursday, Horton’s shares are up about 33% so far, outperforming the company’s comparable gains of 16% and 14% respectively.
Dow Jones industrial average.
The company’s strong first half results are due to an improving economy. For example, housing that started in June was up about 6% compared to May and almost 30% year on year. The June opening figure also beat economists’ forecasts.
The company also sounds optimistic about the coming months. “The housing market conditions remain very robust, with home buyer demand exceeding our current capacity to deliver homes in all of our markets,” said the chairman. “As our top priority is consistently meeting our commitments to our home buyers, we have slowed our home sales pace to better align with our current levels of production, while building out the infrastructure needed to support higher levels of home starts.”
Horton’s current home inventory is about 47,000, up 55% from a year ago.
With that inventory, the company now expects to generate about $27.9 billion in revenue for the full fiscal year, up about $700 million from guidance given in April. With one quarter to go into the company’s fiscal year, the forecast implies more than $8 billion in fourth-quarter revenue, better than Street’s current projection of $7.7 billion.
The stock’s weakness on Thursday morning is probably best described as bull market action. When things go well, investors’ playbooks usually tell them to “sell the news and buy the dips”.
Write to Al Root at email@example.com