Image Source: Unsplash
 

D.R. Horton, Inc. (NYSE: DHI) reported its fiscal 2025 first-quarter results. The company posted a net income of $844.9 million, translating to $2.61 per diluted share. This represents a decline of 7% in earnings per share compared to the same quarter in the previous fiscal year. Consolidated revenues stood at $7.6 billion, a slight decrease of 1% from the $7.7 billion recorded in the same period last year.

The company’s pre-tax income for the quarter was $1.1 billion, with a pre-tax profit margin of 14.6%. This performance enabled D.R. Horton to return $1.2 billion to shareholders through share repurchases and dividends. The homebuilding segment, which forms the core of D.R. Horton’s operations, reported a 2% decline in revenue, amounting to $7.2 billion. The number of homes closed decreased by 1%, reflecting the challenging market conditions.

D.R. Horton’s rental operations also experienced fluctuations. The segment generated $11.9 million in pre-tax income on revenues of $217.8 million. The company sold 311 single-family rental homes and 504 multi-family rental units during the quarter. The rental property inventory at the end of the quarter included 3,140 homes and 12,220 units, indicating a significant investment in this segment.
 

DHI Beats Market Expectations with Fisacal 2025 First Quarter Results

Analysts had anticipated an earnings per share (EPS) of $2.38, but the company surpassed this with an EPS of $2.61. The revenue of $7.6 billion exceeded the forecasted $7.12 billion. While the earnings exceeded expectations, the marginal decline in revenue compared to the previous year reflects the ongoing challenges in the housing market.

The company’s home sales revenue of $7.1 billion, generated from 19,059 homes closed, was a key contributor to the overall revenue. Despite a 1% decrease in both the number of homes closed and the revenue compared to the previous year, D.R. Horton managed to maintain a steady performance in a competitive market. The decline in net sales orders by 1% to 17,837 homes and 2% in value to $6.7 billion further highlights the challenging environment.

D.R. Horton’s financial services segment also faced difficulties, with revenues decreasing to $182.3 million from $192.6 million in the previous year. The pre-tax income for this segment fell to $48.6 million, with a profit margin of 26.7%, down from 34.3% in the prior year. These results underscore the need for strategic adjustments to navigate the evolving market landscape.
 

D.R. Horton Remains Optimistic on Fiscal 2025 Outlook

D.R. Horton remains optimistic about its fiscal 2025 outlook. The company reiterated its guidance for consolidated revenues to range between $36.0 billion and $37.5 billion. It aims to close between 90,000 and 92,000 homes through its homebuilding operations. The company also expects its cash flow from operations to exceed that of fiscal 2024, demonstrating confidence in its ability to generate substantial cash flow.

D.R. Horton updated its fiscal 2025 guidance, projecting an income tax rate of approximately 24.0%. The company plans to repurchase shares in the range of $2.6 billion to $2.8 billion, emphasizing its commitment to returning value to shareholders.

Additionally, the company anticipates paying dividends amounting to approximately $500 million, reinforcing its focus on consistent capital returns.

The company’s strong liquidity position, with a cash balance of $3.0 billion and available credit facilities of $3.5 billion, provides a solid foundation for executing its strategic initiatives. D.R. Horton’s Executive Chairman, David Auld, emphasized the company’s focus on affordable product offerings and flexible lot supply, which are expected to drive long-term growth and shareholder value.

More By This Author: