How Leading U.S. Homebuilder D.R. Horton Topped Earnings Estimates for Q1 FY2025
National homebuilder D.R. Horton reported earnings for its first quarter of fiscal year 2025 on January 21. The earnings beat analysts’ expectations with D.R. Horton’s stock rosing in early trading that day.
The builder reported that it earned $2.61 a share in its fiscal first quarter on revenue of $7.6 billion. Both metrics comfortably beating consensus estimates gathered by FactSet , which had called for earnings of $2.35 a share on about $7.01 billion in sales. D.R. Horton also stated net sales orders in the first quarter ended decreased 1% to 17,837 homes. It repurchased 6.8 million shares for $1.1 billion and paid $128.5 million in cash dividends.
The stock rose 3.6% early Tuesday, January 21, to $152.98 before dipping 0.1%. Coming into the session, the shares had risen about 6.7% in the past five days.
“The D.R. Horton team delivered strong results in our first fiscal quarter of 2025, highlighted by earnings per diluted share of $2.61 on consolidated revenues of $7.6 billion,” said D.R. Horton Executive Chairman David Auld. “Consolidated pre-tax income was $1.1 billion with a pre-tax profit margin of 14.6%, enabling us to return $1.2 billion to shareholders through share repurchases and dividends during the quarter.
“Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is generally still limited, and demographics supporting housing demand remain favorable. Despite continued affordability challenges and competitive market conditions, incentives such as mortgage rate buydowns have helped to address affordability and spur demand. Additionally, given our focus on affordable product offerings, we have continued to start and sell more of our homes with smaller floor plans to meet homebuyer demand.
“Our strong liquidity, low leverage, substantial cash flows, tenured operators and national scale provide us with significant financial and operational flexibility. We are well-positioned with our affordable product offerings and flexible lot supply, and we are focused on maximizing returns in each of our communities. We are maintaining our disciplined approach to capital allocation to enhance the long-term value of D.R. Horton, including consistent and increasing capital returns to our shareholders through share repurchases and dividends.”
According to BusinessWire, Homebuilding revenue for the first quarter of fiscal 2025 decreased 2% to $7.2 billion compared to $7.3 billion in the same quarter of fiscal 2024. Homes closed in the quarter decreased 1% to 19,059 homes compared to 19,340 homes closed in the same quarter of fiscal 2024.
Homebuilding pre-tax income in the first quarter of fiscal 2025 decreased 8% to $1.0 billion with a pre-tax profit margin of 14.1% compared to $1.1 billion of pre-tax income and a 15.0% pre-tax profit margin in the same quarter of fiscal 2024. The Company’s homebuilding return on inventory (ROI) was 26.7% for the trailing twelve months ended December 31, 2024. Homebuilding ROI is calculated as homebuilding pre-tax income for the trailing twelve months divided by average inventory, where average inventory is the sum of ending homebuilding inventory balances for the trailing five quarters divided by five.
During the three months ended December 31, 2024, net cash provided by homebuilding operations was $552.0 million.