D.R. Horton, Inc. (NYSE:DHI) Q2 2025 Earnings Conference Call April 17, 2025 8:30 AM ET Company Participants Jessica Hansen - SVP, Communications Paul Romanowski - President and CEO Michael Murray - EVP and COO Bill Wheat - EVP and CFO Conference Call Participants Stephen Kim - Evercore ISI John Lovallo - UBS Alan Ratner - Zelman & Associates Carl Reichardt - BTIG Sam Reid - Wells Fargo Michael Rehaut - JPMorgan Eric Bosshard - Cleveland Research Matthew Bouley - Barclays Rafe Jadrosich - Bank of America Tr ...

Financial Performance - Net income attributable to D.R. Horton decreased 31% to $810.4 million, or $2.58 per diluted share, compared to $1.2 billion, or $3.52 per diluted share, in the same quarter of fiscal 2024[2]. - Consolidated revenues for the second quarter decreased 15% to $7.7 billion from $9.1 billion in the same quarter of fiscal 2024[3]. - Homebuilding revenue decreased 15% to $7.2 billion, with homes closed decreasing 15% to 19,276 homes compared to the same quarter of fiscal 2024[10]. - Net sales orders decreased 15% to 22,437 homes, with an order value of $8.4 billion, compared to 26,456 homes and $10.1 billion in the same quarter of fiscal 2024[14]. - Homebuilding pre-tax income decreased 31% to $935.0 million, with a pre-tax profit margin of 13.0% compared to 16.0% in the same quarter of fiscal 2024[11]. - Revenues for the three months ended March 31, 2025, were $7,734.0 million, a decrease of 15.1% compared to $9,107.2 million for the same period in 2024[35]. - Net income attributable to D.R. Horton, Inc. for the six months ended March 31, 2025, was $1,655.3 million, down 21.9% from $2,119.5 million for the same period in 2024[35]. Assets and Liabilities - Total assets as of March 31, 2025, were $35,690.0 million, a slight decrease from $36,104.3 million as of September 30, 2024[33]. - The company’s total liabilities increased to $10,831.3 million as of March 31, 2025, from $10,279.9 million as of September 30, 2024, indicating a rise of 5.4%[33]. - The total liabilities as of March 31, 2025, were $10,831.3 million, with notes payable accounting for $6,518.4 million[39]. - The company reported a net cash used in financing activities of $2,141.9 million for the six months ended March 31, 2025, compared to $270.6 million for the same period in 2024[37]. Cash and Liquidity - Cash and cash equivalents decreased to $2,471.4 million as of March 31, 2025, from $4,516.4 million as of September 30, 2024, representing a decline of 45.4%[33]. - Cash provided by operating activities was $876.0 million, while cash used in rental activities was $(381.6) million[42]. - The company experienced a decrease in cash and cash equivalents from $4,516.4 million as of September 30, 2024, to $2,471.4 million as of March 31, 2025[39]. Shareholder Returns - D.R. Horton repurchased 9.7 million shares for $1.3 billion during the second quarter, totaling 16.5 million shares repurchased for $2.4 billion in the first six months of fiscal 2025[23]. - The company declared a quarterly cash dividend of $0.40 per share, payable on May 9, 2025[22]. - D.R. Horton maintained a disciplined approach to capital allocation, consistently returning capital to shareholders through share repurchases and dividends[29]. Future Outlook - For fiscal 2025, D.R. Horton expects consolidated revenues in the range of $33.3 billion to $34.8 billion and homes closed between 85,000 to 87,000[26]. - The company is focused on maximizing returns in each of its communities with affordable product offerings and flexible lot supply[29]. Inventory and Sales - Total inventory increased to $26,482.4 million as of March 31, 2025, compared to $24,903.2 million as of September 30, 2024, reflecting a growth of 6.3%[33]. - Home sales revenue for the three months ended March 31, 2025, was $7,180.9 million, contributing to a consolidated revenue of $7,734.0 million[42]. - The cost of sales for home sales was $5,614.7 million, resulting in a gross profit of $1,566.2 million for the same period[42]. - Home sales revenue for the three months ended March 31, 2024, was $8,466.7 million, contributing to a consolidated revenue of $9,107.2 million[45]. - For the six months ended March 31, 2024, home sales revenue reached $15,743.1 million, with consolidated revenue totaling $16,833.1 million[45]. Orders and Backlog - The company reported net sales orders of 22,437 homes valued at $8,358.6 million for the three months ended March 31, 2025, compared to 26,456 homes valued at $10,063.2 million for the same period in 2024[48]. - As of March 31, 2025, the sales order backlog consisted of 14,164 homes valued at $5,476.7 million, down from 17,873 homes valued at $7,039.3 million as of March 31, 2024[52]. - Homes closed during the three months ended March 31, 2025, totaled 19,276, with a value of $7,180.9 million, while 22,548 homes were closed in the same period of 2024, valued at $8,466.7 million[50]. Operational Metrics - The company's debt to total capital ratio was 21.1% as of March 31, 2025, with total liquidity of $5.8 billion[5]. - The company controlled a total of 613,100 lots as of March 31, 2025, compared to 632,900 lots as of September 30, 2024[54]. - Homes in inventory as of March 31, 2025, totaled 36,900, a slight decrease from 37,400 homes as of September 30, 2024[58].

D.R. Horton (DHI) reported $7.73 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 15.1%. EPS of $2.58 for the same period compares to $3.52 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $8.09 billion, representing a surprise of -4.40%. The company delivered an EPS surprise of -3.01%, with the consensus EPS estimate being $2.66.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how ...

Core Viewpoint - D.R. Horton Inc. is expected to report a decline in earnings and revenues for the second quarter of fiscal 2025, with significant year-over-year decreases anticipated in key metrics [1][2][3]. Revenue Estimates - The Zacks Consensus Estimate for D.R. Horton's earnings per share (EPS) is $2.67, reflecting a 24.2% decline from the previous year's EPS of $3.52 [2]. - Total revenues for the quarter are projected to be between $7.7 billion and $8.2 billion, down from $9.1 billion reported a year ago, indicating an 11.2% year-over-year decline [3][4]. Homebuilding Segment Performance - The Homebuilding segment, which accounted for 94.1% of total revenues in the first quarter, is expected to see a decline in revenues due to decreased home closures amid high mortgage rates and tariff uncertainties [4]. - The company anticipates closing between 20,000 and 20,500 homes in the second quarter, a decrease from 22,548 homes closed in the same quarter last year [4][5]. Margin Expectations - The gross margin for home sales is expected to be between 21.5% and 22%, down from 23.2% in the prior year, reflecting a contraction of approximately 150 basis points [7]. - Selling, general and administrative (SG&A) expenses as a percentage of revenues are projected to rise to 8.4%, compared to 7.2% reported a year ago [8]. Orders and Backlog - Net sales orders for the fiscal second quarter are predicted to decline by 4% year over year to 25,406 units [9]. - The backlog is expected to decrease by 9.2% year over year to 16,230 units, with a projected backlog value of $6.31 billion, indicating a decline of 10.3% [10]. Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of -0.54% and a Zacks Rank of 3 (Hold) [11][12].

Wall Street analysts expect D.R. Horton (DHI) to post quarterly earnings of $2.69 per share in its upcoming report, which indicates a year-over-year decline of 23.6%. Revenues are expected to be $8.14 billion, down 10.6% from the year-ago quarter.The current level reflects a downward revision of 2.2% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.Before a compa ...

The market expects D.R. Horton (DHI) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on ...

Group 1: Company Performance - D.R. Horton (DHI) shares increased by 4.6% to close at $127.87, supported by solid trading volume, contrasting with an 8.7% loss over the past four weeks [1] - The company is expected to report quarterly earnings of $2.69 per share, reflecting a year-over-year decline of 23.6%, with revenues anticipated at $8.14 billion, down 10.6% from the previous year [2] - The consensus EPS estimate for D.R. Horton has been revised 0.6% lower in the last 30 days, indicating a negative trend in earnings estimate revisions [4] Group 2: Industry Insights - Homebuilding stocks, including D.R. Horton, surged due to favorable policy outcomes, specifically tariff exceptions for Canada and Mexico, which the National Association of Home Builders described as a "major win" for the industry [2] - D.R. Horton is part of the Zacks Building Products - Home Builders industry, where PulteGroup (PHM) also operates, closing 3.6% higher at $101.24, but has seen a -9.7% return in the past month [4] - PulteGroup's consensus EPS estimate remains unchanged at $2.48, representing a year-over-year change of -13.6%, and it currently holds a Zacks Rank of 4 (Sell) [5]

Group 1 - The company aims to invest in firms with strong qualitative attributes, purchasing them at attractive prices based on fundamentals, and holding them indefinitely [1] - The investment strategy involves managing a concentrated portfolio to avoid underperformers while maximizing exposure to high-potential winners [1] - The company plans to publish articles on selected companies approximately three times a week, with detailed quarterly follow-ups and ongoing updates [1] Group 2 - The analyst has no current stock, option, or derivative positions in any mentioned companies and does not plan to initiate any within the next 72 hours [2] - The article reflects the analyst's personal opinions and is not influenced by any business relationships with the companies discussed [2]

Core Insights - Elliott Gue is recognized as a leading expert in the energy sector, with extensive experience and a strong educational background in the field [1] - The Energy & Income Advisor, launched by Elliott Gue in October 2012, focuses on identifying profitable investment opportunities in the energy sector, including growth stocks and high-yielding utilities [1] Group 1 - Elliott Gue has dedicated over a decade to understanding the energy industry through various means such as attending conferences and engaging with management teams [1] - The publication launched by Elliott Gue provides in-depth analysis and rational assessments of investment opportunities in the energy sector [1] - Roger Conrad contributes additional analysis on master limited partnerships and Canadian energy stocks to the Energy & Income Advisor [1]

Company Performance - D.R. Horton (DHI) closed at $126.42, showing a +0.35% change from the previous day, outperforming the S&P 500's loss of 0.5% [1] - The stock has decreased by 11.85% over the past month, which is worse than the Construction sector's decline of 10.1% and the S&P 500's loss of 0.47% [1] Upcoming Earnings - D.R. Horton is set to release its earnings report on April 17, 2025, with an expected EPS of $2.74, reflecting a 22.16% decrease from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $8.16 billion, down 10.42% from the previous year [2] Full-Year Estimates - The full-year Zacks Consensus Estimates predict earnings of $13.04 per share and revenue of $36.71 billion, indicating year-over-year changes of -9.07% and -0.24%, respectively [3] Analyst Estimates - Recent changes in analyst estimates for D.R. Horton suggest a shifting business landscape, with positive revisions indicating a favorable outlook on the company's health and profitability [4] Zacks Rank - D.R. Horton currently holds a Zacks Rank of 5 (Strong Sell), with a 2.6% decrease in the Consensus EPS estimate over the last 30 days [6] Valuation Metrics - The company's Forward P/E ratio stands at 9.66, which is higher than the industry average of 8.22 [7] - D.R. Horton's PEG ratio is currently 0.53, compared to the Building Products - Home Builders industry's average PEG ratio of 0.92 [8] Industry Context - The Building Products - Home Builders industry ranks in the bottom 3% of all industries, with a Zacks Industry Rank of 244 [9]