D.R. Horton 2Q income more than doubles
D.R. Horton's (DHI) second-quarter income spiked 144%, despite falling revenue, as the firm cashed in on a $59.2 million tax benefit. The Fort Worth, Texas-based homebuilder reported earnings of $27.8 million, or 9 cents a share, for the three months ended March 31, up from $11.4 million, or 4 cents a share, one year prior. For its fiscal first quarter, D.R. Horton reported a net loss of $20.4 million. Homebuilding revenue decreased 18% in the second quarter, hitting $733.1 million down from $896.8 million a year earlier. The company closed 3,516 homes during the quarter down from 4,260 a year ago. The order backlog of homes under contract at the end of the quarter was 16% lower than last year. Donald Horton, chairman of the Texas homebuilder, said the firm is increasing housing inventory to meet seasonal demand. He expects closings and pretax profitability to be higher in the second half of fiscal 2011 than in the first half. "Market conditions in the homebuilding industry are still challenging, with high foreclosures, significant existing home inventory, high unemployment, tight mortgage lending standards and weak consumer confidence. However, housing affordability remains near record highs, interest rates are favorable and new home inventory is still very low," Horton said. "We continue to focus on providing affordable homes for the first-time buyer while having product available for move-up buyers, further adjusting our cost structure relative to our current sales pace." D.R. Horton sold the most homes by volume and dollar value in the south central region of the country during the second quarter — almost 2,000 homes for $318.3 million. The builder netted about $1 billion in nationwide home sales orders during the first three months of 2011 down from $1.3 billion the year prior. As of March 31, D.R. Horton had total assets of $5.6 billion. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. Disclosure: The author holds no relevant investments.