D.R. Horton, Inc. (NYSE:DHI), Ft. Worth on Thursday reported net income for its second fiscal quarter ended March 31, 2017 increased 17% to $229.2 million, or $0.60 per diluted share, from $195.1 million, or $0.52 per diluted share, in the same quarter of fiscal 2016. Analysts were expecting a gain of $0.59 per share.
Home building revenue for the quarter of increased 17% to $3.2 billion from $2.7 billion in the same quarter of fiscal 2016. Homes closed in the quarter increased 15% to 10,685 homes compared to 9,262 homes in the prior year quarter.
Net sales orders increased 14% to 13,991 homes and 17% in value to $4.2 billion compared to 12,292 homes and $3.6 billion in the prior year quarter. The cancellation rate was 20%, up from 19% in the same quarter of fiscal 2016.
The company’s sales order backlog of homes under contract at March 31, 2017 increased 7% to 14,618 homes and 9% in value to $4.4 billion compared to 13,695 homes and $4.1 billion at March 31, 2016.
DHI ended the quarter with $947.9 million of home building unrestricted cash and home building debt to total capital of 28.0%.
For the six months ended March 31, 2017, net income increased 24% to $436.1 million, or $1.15 per diluted share, from $352.8 million, or $0.94 per diluted share, in the same period of fiscal 2016. Home building revenue increased 18% to $6.0 billion from $5.1 billion in the first six months of fiscal 2016. Homes closed in the six-month period increased 16% to 20,089 homes compared to 17,323 homes in the same period of fiscal 2016. Net sales orders for the first six months of fiscal 2017 increased 14% to 23,232 homes from 20,356 homes in the first six months of fiscal 2016, and the value of net sales orders increased 17% to $7.0 billion from $5.9 billion.
Donald R. Horton, Chairman of the Board, said, “The spring selling season is going well, as the value of our net sales orders increased by 52% sequentially from the December quarter and 17% from the March quarter last year. These results reflect the strength of our experienced operational teams, diverse product offerings through our family of brands and good market conditions across our broad national footprint.
He added, “With 27,100 homes in inventory at the end of March and a robust supply of lots, we are well-positioned for the remainder of the spring and the second half of fiscal 2017.”
The company updated fiscal 2017 guidance:
- Increasing the range of consolidated revenues to $13.6 billion to $14.0 billion from $13.4 billion to $13.8 billion.
- Increasing the range of homes closed to 44,500 to 46,000 homes from 43,500 to 45,500 homes.
- Homebuilding SG&A expense of 8.8% to 9.1% of homebuilding revenues compared to prior guidance of approximately 9.0%.
- Increasing financial services pre-tax profit margin to approximately 35% from approximately 30%.
- An income tax rate of approximately 35.5% compared to prior guidance of approximately 35.0%.
