D.R. Horton(US:DHI) ZACKS·2026-01-16 17:01Core Viewpoint - D.R. Horton Inc. (DHI) is expected to report its first-quarter fiscal 2026 results on January 20, with performance reflecting a balance between maintaining volumes and addressing affordability-driven demand constraints [1] Financial Performance - In the last quarter, DHI's earnings missed the Zacks Consensus Estimate by 7.6%, while total revenues exceeded the estimate by 2.4%. Both metrics showed declines of 22% and 3.2% year-over-year, respectively [2] - The Zacks Consensus Estimate for the upcoming quarter's earnings per share (EPS) has decreased to $1.96 from $1.97, indicating a 24.9% decline from the previous year's EPS of $2.61. The revenue consensus is set at $6.71 billion, reflecting an 11.9% year-over-year decline [3] Revenue Expectations - DHI anticipates total revenues for the quarter to be between $6.3 billion and $6.8 billion, down from $7.61 billion reported a year ago. The Homebuilding segment, which contributed 92% of total revenues in fiscal 2025, is expected to see a decline due to fewer homes closed, with an estimated 17,100 to 17,600 units compared to 19,059 units in the same quarter last year [5] - Homebuilding revenues are predicted to decline by 11.5% year-over-year to $6.34 billion, with home closures expected to be 17,483 units, down 8.3% year-over-year. Rental Property revenues are projected at $186.4 million, indicating a 14.4% decline from the previous year [6] Margin Analysis - DHI expects gross margins to be pressured by lower average selling prices (ASPs), elevated incentives, and higher lot costs. The home sales gross margin is anticipated to be between 20% and 20.5%, down from 22.7% in the prior year, with a predicted contraction of 260 basis points [9][13] - The company has noted that lot costs continue to be a structural headwind, with year-over-year increases expected to impact closings for several quarters. While construction cycle times have improved, the benefits to margins from efficiency gains are likely to be limited in the near term [11] Orders and Backlog - For the fiscal first quarter, net sales orders are predicted to increase by only 1% year-over-year to 18,012 units, with backlog units estimated at 11,314, indicating a 2.8% growth from a year ago. The value of the backlog is expected to be $4.35 billion, reflecting a 1.1% year-over-year increase [14] Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of -8.67% and a Zacks Rank of 4 (Sell), indicating lower odds of an earnings surprise [15]