Financial Data and Key Metrics Changes - D.R. Horton reported consolidated pre-tax income of $798 million on revenues of $6.9 billion, with a pre-tax profit margin of 11.6% for Q1 2026 [4] - Earnings per diluted share decreased to $2.03 from $2.61 in the prior year quarter, with net income of $595 million [7] - Home sales revenues were $6.5 billion from 17,818 homes closed, down from $7.1 billion from 19,059 homes closed in the prior year quarter [7][8] - The average closing price for homes was $365,500, flat sequentially but down 3% year over year [8] Business Line Data and Key Metrics Changes - Net sales orders increased by 3% year over year to 18,300 homes, while order value remained unchanged at $6.7 billion [10] - The gross profit margin on home sales revenues was 20.4%, up 40 basis points sequentially, primarily due to a recovery of prior-period warranty costs [11] - Home building SG&A expenses decreased by 1% year over year, but as a percentage of revenues, it increased to 9.7% from 8.9% in the prior year quarter [12] Market Data and Key Metrics Changes - 64% of mortgage company closings were to first-time home buyers, indicating a focus on affordable housing [6] - The average number of active selling communities increased by 2% sequentially and 12% year over year [10] - The company ended the quarter with 30,400 homes in inventory, of which 20,000 were unsold [14] Company Strategy and Development Direction - D.R. Horton is focused on capital efficiency to generate strong operating cash flows and deliver returns to shareholders, with $3.6 billion generated from operations over the past 12 months [5] - The company aims to tailor product offerings and sales incentives based on demand in each market to maximize returns [6] - The strategy includes managing investments in lots, land, and development based on current market conditions, with a focus on relationships with land developers [15] Management's Comments on Operating Environment and Future Outlook - Management noted that new home demand is impacted by affordability constraints and cautious consumer sentiment, but they are responding with discipline [4] - The company expects consolidated revenues for Q2 2026 to be in the range of $7.3-$7.8 billion and homes closed to be between 19,700-20,200 [24] - For the full year, the company anticipates consolidated revenues of approximately $33.5-$35 billion and homes closed to be in the range of 86,000-88,000 [25] Other Important Information - D.R. Horton repurchased 4.4 million shares for $670 million and paid cash dividends of $0.45 per share, totaling $132 million [21] - The company has a strong balance sheet with $6.6 billion of consolidated liquidity and plans to maintain leverage around 20% over the long term [22] Q&A Session Summary Question: Inquiry about SG&A expenses - Management stated that SG&A was in line with expectations and attributed the increase to lower closings, but they expect it to stabilize over the year [28][29] Question: Capital allocation and cash flow expectations - Management confirmed that cash flow expectations remain reasonable, with a target of over $3 billion for the year [32] Question: Community count growth and future expectations - Management expects community count growth to continue but may drift down to mid-single to high-single digit range [35] Question: Warranty costs impact on gross margin - Management indicated that warranty recovery was unexpected but beneficial, and they expect warranty costs to normalize going forward [59][61] Question: Demand trends and inventory levels - Management noted that demand remains strong despite low job growth, and inventory levels are more balanced compared to the previous year [97][91]

Financial Performance & Expectations - D.R. Horton's Q1 FY26 net income was $594.8 million, resulting in earnings per diluted share of $2.03[88] - The company's consolidated pre-tax income for Q1 FY26 was $798.1 million, with a pre-tax profit margin of 11.6%[88] - D.R. Horton anticipates FY 2026 consolidated revenues to be in the range of $33.5 billion to $35.0 billion and expects to close between 86,000 and 88,000 homes[18] - The company expects to repurchase approximately $2.5 billion of common stock and pay out ~$500 million in dividends in fiscal year 2026[18,58] Market Position & Operations - D.R. Horton closed 17,818 homes in Q1 FY26, generating home sales revenues of $6.5 billion[88,89] - 63% of D.R. Horton's homebuyers are first-time homebuyers[8] - D.R. Horton's average sales price is $368.3K[8,28] - D.R. Horton's financial services segment had an 81% mortgage capture rate of D.R. Horton homebuyers[15,84] Land and Lot Strategy - D.R. Horton had 445,000 controlled lots (75%) and 145,500 owned lots (25%) as of December 31, 2025[78] - Forestar, in which D.R. Horton owns 62%, sold 14,240 lots and generated $1.7 billion of revenue in FY25[84,110]

D.R. Horton recorded a lower first-quarter profit as affordability concerns continued to put off home buyers, hurting sales and forcing the company to offer big incentives. ...

Group 1 - 3M Co. is expected to report quarterly earnings of $1.80 per share on revenue of $6.01 billion, with shares slipping 0.2% to $167.45 in after-hours trading [1] - D.R. Horton Inc. is projected to post quarterly earnings of $1.93 per share on revenue of $6.60 billion, with shares falling 0.2% to $155.67 in after-hours trading [1] - BOK Financial Corp. reported better-than-expected earnings of $2.89 per share, exceeding the analyst consensus estimate of $2.18 per share, with quarterly sales of $589.563 million surpassing the estimate of $550.100 million; shares gained 0.4% to close at $128.21 [1] - United Airlines Holdings Inc. is projected to report quarterly earnings of $2.94 per share on revenue of $15.40 billion, with shares slipping 0.1% to $113.45 in after-hours trading [1] - Netflix Inc. is expected to post quarterly earnings of 55 cents per share on revenue of $11.97 billion, with shares rising 0.5% to $88.44 in after-hours trading [1]

Group 1 - The core viewpoint is that lower mortgage rates and potential housing policy changes may have a more significant impact on the housing market than the quarterly results of America's largest homebuilder [1] Group 2 - The upcoming report from the largest homebuilder is anticipated to reflect the influence of these external factors rather than just financial performance [1]

Group 1: Market Overview - The trading week begins on Tuesday, January 19th, 2026, with the market closed on Monday for Martin Luther King, Jr. Day [1] - The delayed November Personal Consumption Expenditures (PCE) report is expected on Thursday, skipping the October report due to a government shutdown [4] - The quarterly Gross Domestic Product (GDP) for Q3 2025 is also due on Thursday, with expectations for a revision in line with the previously announced +4.3% growth [5] Group 2: Job Market Insights - Initial Jobless Claims are anticipated to rise above +200K, from +198K reported last week, indicating a stable jobless claims environment despite weak monthly job numbers [6] Group 3: Q4 Earnings Reports - Q4 earnings season begins with reports from 3M (MMM) and D.R. Horton (DHI) before the market opens, and from Netflix (NFLX), United Airlines (UAL), and Interactive Brokers Group (IBKR) after the market closes [7] - Interactive Brokers is expected to grow by +2% on its bottom line and +4.3% on the top, holding a buy rating [9] - Netflix aims for +27.9% growth in earnings and +16.8% in revenues, continuing its expansion into global markets, holding a hold rating [9] - D.R. Horton is expected to improve on a -25% earnings growth forecast with -12% revenues [9]

Core Viewpoint - Investor Steve Eisman suggests that President Trump's initiative to lower mortgage costs could lead to a short-term rally in U.S. homebuilder stocks, despite not addressing deeper market issues [1]. Group 1: Policy Impact - Trump's proposal includes purchasing $200 billion in mortgage-backed securities to reduce borrowing costs, which Eisman believes could trigger a rally in homebuilder stocks [2]. - The current mortgage rates have decreased to 6%, and if they drop to 5.5%, it is expected that both existing and new home sales will improve [3]. Group 2: Stock Performance - Two key homebuilder stocks, Lennar Corp. and D.R. Horton Inc., are highlighted as having potential for upward movement due to falling mortgage rates and their low valuations [3]. - D.R. Horton has a market capitalization of $45 billion, and Eisman anticipates that these stocks will rise more rapidly than expected [3]. Group 3: Market Context - The homebuilding sector had a challenging year in 2025, impacted by high rates, tariffs, and immigration policies, but is showing positive momentum at the start of 2026 [4]. - Year-to-date performance for Lennar Corp. is +13.79% and for D.R. Horton Inc. is +7.03%, indicating a recovery trend [5].

Core 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]

Core Viewpoint - D.R. Horton, Inc. is expected to report a decline in earnings and revenue for the upcoming first quarter compared to the previous year, indicating potential challenges in the housing market [1]. Group 1: Earnings and Revenue Expectations - Analysts anticipate D.R. Horton will report quarterly earnings of $1.92 per share, a decrease from $2.61 per share in the same quarter last year [1]. - The consensus estimate for quarterly revenue is $6.65 billion, down from $7.61 billion a year earlier [1]. Group 2: Recent Performance - On October 28, D.R. Horton reported quarterly revenue of $9.7 billion, surpassing analyst estimates of $9.4 billion [2]. - Quarterly earnings were reported at $3.04 per share, which was below the consensus forecast of $3.28 per share [2]. - Following the earnings report, D.R. Horton shares increased by 1.1%, closing at $161.00 [2]. Group 3: Analyst Ratings and Price Targets - Citigroup analyst maintained a Neutral rating and reduced the price target from $163 to $154 [4]. - Citizens analyst downgraded the stock from Market Outperform to Market Perform [4]. - UBS analyst maintained a Buy rating but lowered the price target from $195 to $191 [4]. - Wells Fargo analyst downgraded the stock from Overweight to Equal-Weight and cut the price target from $180 to $155 [4]. - Barclays analyst maintained an Equal-Weight rating and increased the price target from $110 to $132 [4].

Core Viewpoint - D.R. Horton, Inc. is expected to report a decline in earnings and revenue for the upcoming first quarter, reflecting broader challenges in the housing market [1]. Group 1: Earnings and Revenue Expectations - D.R. Horton is projected to report earnings of $1.92 per share for the first quarter, a decrease from $2.61 per share in the same period last year [1]. - The consensus estimate for quarterly revenue is $6.65 billion, down from $7.61 billion a year earlier [1]. Group 2: Recent Performance - On October 28, D.R. Horton reported quarterly revenue of $9.7 billion, exceeding analyst estimates of $9.4 billion [2]. - Quarterly earnings were reported at $3.04 per share, which was below the consensus forecast of $3.28 per share [2]. - Following the earnings report, D.R. Horton shares increased by 1.1%, closing at $161.00 [2]. Group 3: Analyst Ratings and Price Targets - Citigroup analyst Anthony Pettinari maintained a Neutral rating and reduced the price target from $163 to $154 [4]. - Citizens analyst James McCanless downgraded the stock from Market Outperform to Market Perform [4]. - UBS analyst John Lovallo maintained a Buy rating but lowered the price target from $195 to $191 [4]. - Wells Fargo analyst Sam Reid downgraded the stock from Overweight to Equal-Weight and cut the price target from $180 to $155 [4]. - Barclays analyst Matthew Bouley maintained an Equal-Weight rating and raised the price target from $110 to $132 [4].