D.R. Horton Stock Plunges on Q4 Earnings & Revenue Miss

Core Insights - D.R. Horton, Inc. reported fourth-quarter fiscal 2024 results that missed earnings and revenue expectations, leading to an 11.7% drop in share price following the earnings release [1][2][4] Financial Performance - Adjusted earnings were $3.92 per share, falling short of the Zacks Consensus Estimate of $4.20 by 6.7% and down 11.9% year-over-year from $4.45 [4] - Total revenues amounted to $10 billion, a decrease of 4.8% year-over-year, and below the analysts' expectation of $10.2 billion [4] - The consolidated pre-tax profit margin was 17.1%, down from 19.2% a year ago [5] Segment Performance - Homebuilding revenues reached $8.95 billion, up 1.8% from the prior-year quarter, with home sales at $8.93 billion, an increase of 1.7% [6] - Home closings rose 3% year-over-year to 23,647 homes, while net sales orders increased by 0.5% to 19,035 homes [6] - The value of net orders decreased to $7.15 billion from $7.25 billion year-over-year, with a cancellation rate of 21%, unchanged from the previous year [6] Backlog and Inventory - The order backlog at the end of fiscal 2024 was 12,180 homes, down 20% year-over-year, with a backlog value of $4.8 billion, a 19% decrease [7] - D.R. Horton had 37,400 homes in inventory, with 25,700 unsold, and a land and lot portfolio totaling 632,900 lots [12] Fiscal Year Highlights - For fiscal 2024, total revenues grew 4% to $36.8 billion, driven by a 7% increase in home sales revenues to $33.9 billion [9] - Homes closed increased by 8% to 89,690 homes compared to fiscal 2023 [9] - The homebuilding pre-tax margin for fiscal 2024 was 16.1%, contracting by 50 basis points from fiscal 2023 [10] Balance Sheet and Liquidity - Cash, cash equivalents, and restricted cash totaled $4.54 billion as of September 30, 2024, up from $3.9 billion at the end of fiscal 2023 [11] - Total liquidity was reported at $7.6 billion, with $3.1 billion available on the revolving credit facility [11] Shareholder Returns - D.R. Horton increased its quarterly dividend by 33% to 40 cents per share, reflecting a commitment to disciplined capital allocation [3] - The company repurchased 3.4 million shares for $561.2 million in the fourth quarter, with a remaining stock repurchase authorization of $3.6 billion [13] Fiscal 2025 Guidance - D.R. Horton expects consolidated revenues between $36 billion and $37.5 billion for fiscal 2025, below the consensus estimate of $39.5 billion [14] - Homes closed are anticipated to be between 90,000 and 92,000 units [14]