D.R. Horton plans return to record home closings in five years
Donald R. Horton, D.R. Horton (DHI) chairman of the board, said his "personal goal" is to annually close 50,000 units five years from now, a figure the homebuilder hasn’t reached since 2006, when it set the industry record. The Fort Worth, Texas-based company is the nation's largest homebuilder by volume. Horton expressed his goal on a Friday conference call, but then allowed himself a little more room. "I don't know if it's going to take five or seven years," he said. "I just know our balance sheet positions us to be able to come back to that number more quickly than many anticipate." Returning to closing 50,000 units a year is a robust growth trend, one that requires double-digit growth for the next five years. D.R. Horton closed 16,695 homes in its fiscal 2011 ended Sept. 30, a 20% drop from 20,875 homes closed in fiscal 2010. The homebuilder reported income of $27.7 million, or 9 cents a share, for the three months ended Dec. 31, compared to a loss of $20.4 million, or 6 cents a share, a year earlier. Small and medium-sized homebuilders are leaving the market because of the inability to obtain financing. Large builders, such as D.R. Horton, are capturing market share in areas across the country as they continue to control land and lot supply. "Of course, with our strong balance sheet, that affords us the opportunity to control the land and lots, and most importantly be able to develop the lots when the land increases," Horton said. Housing demand is rising in the Sun Belt and coastal markets, while the northern markets are still weak, he said. At the company's annual shareholder meeting Thursday in Fort Worth, Tex., Horton said he intends to take advantage of his company's cost structure to dominate the move-up market. On the conference call, he said the only impediment to the company's pursuit is high unemployment, which stands at 8.5%. "Because there are no new jobs being created of any significance and until we get our act together in new job creation, the new homebuilding industry will continue to scrape along the bottom with little ups and little downs with no significant improvement," Horton said. Write to Justin T. Hilley. Follow him on Twitter @JustinHilley.