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DR Horton Inc. (DHI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
We upgraded our recommendation on D.R Horton Inc. from Neutral to Outperform on the strong start to fiscal 2014. After a dismal fourth quarter, D.R. Horton reported strong first-quarter fiscal 2014 results surpassing the Zacks Consensus Estimate for both revenues and earnings due to improved market conditions. Earnings jumped 80% year over year driven by homebuilding revenue growth of 33% and strong margins. Order trends improved slightly after a slower second half of 2013 due to better housing market conditions across most markets. Moreover, the weekly sales pace accelerated in Jan 2014 making management optimistic for the upcoming spring selling season. Also, the company's strong land position keeps it well positioned to meet demand in fiscal 2014 and 2015.
D.R. Horton Inc., based in Texas, is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. Homes vary in sizes from 1,000 to 4,000 square feet, with prices ranging from $100,000 to more than $1,000,000. In fiscal 2013, the company closed 24,155 homes at an average sales price (ASP) of $249,400.
D.R. Horton operates through two segments: Homebuilding and Financial Services. The Homebuilding segment comprises six reporting regions and derives revenues primarily from the sale of completed homes built on either its self-constructed or acquired lands. In addition to single-family detached homes, the segment builds attached homes, such as town homes, duplexes, triplexes and condominiums. The segment also derives revenues by selling lands and lots. The segment recorded revenues of $6.3 billion in fiscal 2013, accounting for 97% of the company's revenues.
The Financial Services segment, through the mortgage subsidiary, DHI Mortgage, derives its income from originating and selling mortgages and collecting fees for title insurance and closing services.
D.R. Horton's operations are spread over 77 metropolitan markets in 27 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the U.S. D.R. Horton's houses are sold under the brand names America's Builder, Emerald Homes and Breland Homes.
The company acquired the homebuilding operations of Breland Homes in Huntsville, Ala. in Aug 2012, and Regent Homes in Oct 2013 which operates in Charlotte, Greensboro and Winston-Salem, N.C.
DR Horton Inc. (DHI): Read the Full Research Report
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