Here's What Investors Must Know Ahead of D.R. Horton's Q4 Earnings

Core Insights - D.R. Horton Inc. (DHI) is expected to report its fourth-quarter fiscal 2025 results on October 28, with prior earnings and revenues exceeding estimates by 15.9% and 5.1%, respectively, but showing declines of 18% and 7% year-over-year [1][9] Revenue Estimates - The Zacks Consensus Estimate for DHI's earnings per share (EPS) is $3.29, reflecting a 16.1% decline from the previous year's EPS of $3.92 [3] - Revenue estimates for the quarter are set at $9.45 billion, indicating a 5.5% year-over-year decline [3] - D.R. Horton anticipates total revenues for the quarter to be between $9.1 billion and $9.6 billion, down from $10 billion reported a year ago [4] Homebuilding Activity - A slowdown in homebuilding activity is expected, with housing starts projected to be lower than in the previous quarter [5] - The company expects home closures to be between 23,500 and 24,000 units, slightly down from 23,647 units in the same quarter last year [5] Revenue Breakdown - Homebuilding revenues are predicted to decline by 2.1% year-over-year to $8.76 billion, with home closures expected to increase by 0.7% to 23,811 units [6] - Rental Property revenues are estimated at $422.2 million, reflecting a significant 40.1% decline from the previous year [6] - Forestar revenues are projected at $550.5 million, indicating a slight 0.2% decline year-over-year [7] - Financial Services segment revenues are expected to be $213.9 million, down 3.7% from the previous year [7] Margin Expectations - The company anticipates a decrease in gross margins due to inflationary pressures and high sales incentives, with expected home sales gross margin between 21% and 21.5%, down from 23.6% a year ago [8][10] Orders and Backlog - Net sales orders for the fourth quarter are predicted to increase by 11.6% year-over-year to 21,239 units, while backlog is expected to decrease by 5.6% to 11,504 units [11] - The value of the backlog is estimated at $4.49 billion, indicating a 5.9% decline year-over-year [11] Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of -0.91% and a Zacks Rank of 3 [12]