Homebuilder D.R. Horton’s Stock Gains on Earnings Beat, Raised Revenue Guidance

D.R. Horton (DHI) shares climbed close to 4% in premarket trading Thursday after reporting second-quarter results that surpassed expectations, as the company kicks off a stretch of homebuilder earnings over the next few weeks.

The homebuilder posted net income of $1.17 billion, for a diluted earnings per share (EPS) of $3.52, on total revenue of $9.11 billion, all above estimates compiled by Visible Alpha. The market for D.R. Horton’s services picked up in the quarter compared to the same period last year, with homebuilding revenue up 13% to $8.5 billion from $7.5 billion, and a 15% increase in homes closed, with 22,548 this year compared with 19,664 in the year-ago period.

“We are well-positioned with our affordable product offerings and flexible lot supply,” D.R. Horton’s board chair Donald Horton said in a statement. “We are focused on maximizing returns in each of our communities and generating consistently strong cash flows from our homebuilding operations. Our strong liquidity and low leverage provide us with significant financial flexibility, and we plan to maintain our disciplined approach to investing capital to enhance the long-term value of our company, including consistently returning capital to our shareholders by increasing dividends and share repurchases over time.”

Horton said that while interest and mortgage rates remain high, the company’s net sales orders increased 46% from the first quarter, and 14% from last year’s second quarter, leading D.R. Horton to raise its full-year guidance for homes closed and revenue.

Revenue for fiscal 2024 is projected between $36.7 billion to $37.7 billion, up from the $36 billion to $37.3 billion range the company projected in its first-quarter earnings report. D.R. Horton also expects to close between 89,000 to 91,000 homes, compared to the 87,000 to 90,000 homes it expected after the last quarter. The company said it will provide third-quarter guidance in Thursday morning’s earnings call.

The company declared a dividend of 30 cents per share, which will be paid out May 9 to shareholders of record as of May 2. D.R. Horton also bought back $402 million of its own stock in the quarter, and said it has just over $900 million remaining in its existing stock buyback plan.

A number of other homebuilders are set to report earnings over the next several weeks, including Century Communities (CCS), Meritage Homes (MTH), LGI Homes (LGIH), and Builders FirstSource (BLDR).

D.R. Horton shares were 3.9% higher in premarket trading Thursday at $145.74. With Thursday’s gains, shares were little changed from the start of 2024.