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D.R. Horton (DHI) Misses on Q4 Earnings, Strong View

D.R. Horton Inc.'sDHI adjusted earnings of 60 cents per share in the fourth quarter of fiscal 2015 missed the Zacks Consensus Estimate of 62 cents by 6.3%. Adjusted earnings grew 33.3% year over year from the prior-year level of 45 cents driven by strong profits and an increase in homebuilding revenue.

Fourth-quarter earnings of 2015 exclude a non-cash tax benefit of $17.5 million related to the reduction of valuation allowance on its deferred tax assets. Including the tax benefit, earnings per share came in at 64 cents.

Homebuilding revenues of $3.09 billion climbed 27.7% year over year and surpassed the Zacks Consensus Estimate of $3.05 billion by 1.3% driven by higher number of homes closed and a solid increase in order value.

Quarter in Detail

Home sales increased 27% year over year to $3.05 billion. Land sales contributed $39 million to revenues, higher than $19.7 million in the prior-year quarter.

Net sales orders rose 19% in the fourth quarter to 8,477 homes as housing demand improved. Value of net orders grew 22% to $2.5 billion.

Home closings were up 23% to 10,576 homes in the reported quarter. The upside was driven by growth in all regions.

Quarter-end sales order backlog rose 7.8% to 10,662 homes. Backlog value grew 10% to $3.15 billion. Sales order backlog represents homes under contract but not closed at the end of a certain period.

Consolidated pre-tax income was $338.8 million in the quarter, up 35% year over year.

Fiscal 2015

D.R. Horton's adjusted earnings of $2.03 per share in the fiscal 2015 beats the Zacks Consensus Estimate of $2.02 by 0.5%. Adjusted earnings grew 35.3% year over year from the prior-year level driven by strong homebuilding revenue.

In line with the Zacks Consensus Estimate, homebuilding revenues of $10.56 billion climbed 34.4% year over year driven by higher number of homes closed and a solid increase in order value.

Dividend Hike

D.R. Horton increased quarterly cash dividend by 28% from the prior payment. Quarterly cash dividend of 8 cents per common share is payable on Dec 14, 2015 to stockholders as of Nov 30, 2015.

Outlook

D.R. Horton believes it is well positioned to meet the increasing housing demand on the back of a robust community count, finished lot supply and inventory of homes available for sale.

D.R. Horton carries a Zacks Rank #3 (Hold).

Stocks to Consider

Investors interested in the building sector can consider CalAtlantic Group, Inc. CAA , TRI Pointe Group, Inc. TPH and Lennar Corp. LEN . While CalAtlantic Group and TRI Pointe Group sport a Zacks Rank #1 (Strong Buy), Lennar Corporation carries a Zacks Rank #2 (Buy).

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D R HORTON INC (DHI): Free Stock Analysis Report

LENNAR CORP -A (LEN): Free Stock Analysis Report

TRI POINTE HOME (TPH): Free Stock Analysis Report

CALATLANTIC GRP (CAA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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