D.R. Horton's Q1 Beats on Revenue, EPS

Financial Performance - D R Horton reported fiscal 2025 Q1 EPS of $2 61, exceeding analysts' estimate of $2 35 [1] - Total revenue for Q1 2025 was $7 61 billion, surpassing the expected $7 01 billion [1] - Net income declined by 10 8% YoY to $844 9 million, while revenue decreased by 1 4% YoY [3][6] - Home sales revenue dropped 1 8% YoY to $7 15 billion, with homes closed down 1 5% to 19,059 units [3] - Homebuilding pre-tax income fell 8% to $1 billion, with margins tightening to 14 1% from 15% [7] - Rental operations pre-tax income decreased significantly from $31 3 million to $11 9 million, despite revenue growth from $195 3 million to $217 8 million [7] Business Overview - D R Horton is the largest US homebuilder, operating in 125 metropolitan markets across 36 states [4] - The company specializes in a wide range of residential properties, from affordable to luxury homes [4] - D R Horton has prioritized its affordable housing segment in recent years [4] - The company maintains operational flexibility through its majority stake in Forestar Group [5] - D R Horton benefits from economies of scale and vertical integration, particularly through DHI Mortgage [5] Strategic Initiatives - The company focuses on affordability through smaller home designs and price points [8] - Ownership in Forestar helps maintain cost control and meet housing demand [8] - D R Horton leverages its economies of scale, including capital access and procurement efficiencies [8] - The company plans share repurchases between $2 6 billion and $2 8 billion, signaling confidence in cash flow and shareholder value [9] Outlook - D R Horton maintains its fiscal 2025 revenue guidance of $36 billion to $37 5 billion [11] - The company aims to balance market adaptability with efficiency amid interest rate fluctuations [11] - Investors should monitor the 21% decline in sales order backlog, which may impact future revenue streams [12] - D R Horton's ability to manage competitive pressures and economic slowdowns will be critical in upcoming quarters [12]