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D.R. Horton, Inc., America’s Builder, Reports Fiscal 2017 Third Quarter Earnings and Declares Quarterly Dividend of $0.10 Per Share

ARLINGTON, Texas--(BUSINESS WIRE)--D.R. Horton, Inc. (NYSE:DHI):

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Fiscal 2017 Third Quarter Highlights - comparisons to the prior year quarter

  • Net income increased 16% to $289.0 million or $0.76 per diluted share
  • Consolidated pre-tax income increased 17% to $444.5 million
  • Consolidated pre-tax profit margin improved 10 basis points to 11.8%
  • Net sales orders increased 13% in value to $3.9 billion and 11% in homes to 13,040
  • Homes closed increased 17% in value to $3.7 billion and 16% in homes to 12,497

D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its third fiscal quarter ended June 30, 2017 increased 16% to $289.0 million, or $0.76 per diluted share, from $249.8 million, or $0.66 per diluted share, in the same quarter of fiscal 2016. Homebuilding revenue for the third quarter of fiscal 2017 increased 17% to $3.7 billion from $3.1 billion in the same quarter of fiscal 2016. Homes closed in the quarter increased 16% to 12,497 homes compared to 10,739 homes in the prior year quarter.

For the nine months ended June 30, 2017, net income increased 20% to $725.1 million, or $1.92 per diluted share, from $602.6 million, or $1.61 per diluted share, in the same period of fiscal 2016. Homebuilding revenue for the nine months ended June 30, 2017 increased 18% to $9.7 billion from $8.2 billion in the first nine months of fiscal 2016. Homes closed in the nine-month period increased 16% to 32,586 homes compared to 28,062 homes in the same period of fiscal 2016.

Net sales orders for the third quarter ended June 30, 2017 increased 11% to 13,040 homes and 13% in value to $3.9 billion compared to 11,714 homes and $3.4 billion in the same quarter of fiscal 2016. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the third quarter of fiscal 2017 was 21%, unchanged from the prior year quarter. Net sales orders for the first nine months of fiscal 2017 increased 13% to 36,272 homes from 32,070 homes in the first nine months of fiscal 2016, and the value of net sales orders increased 15% to $10.8 billion from $9.4 billion.

The Company’s sales order backlog of homes under contract at June 30, 2017 increased 3% to 15,161 homes and 6% in value to $4.6 billion compared to 14,670 homes and $4.4 billion at June 30, 2016. The Company’s homes in inventory at June 30, 2017 increased 9% to 27,600 homes compared to 25,300 homes at June 30, 2016.

During the third quarter of fiscal 2017, the Company repurchased 1.85 million shares of its common stock for $60.6 million and repaid at maturity $350 million principal amount of its senior notes. The Company ended the quarter with $460.8 million of homebuilding unrestricted cash and a homebuilding debt to total capital ratio of 24.8%. Homebuilding debt to total capital consists of homebuilding notes payable divided by total equity plus homebuilding notes payable.

Donald R. Horton, Chairman of the Board, said, “The D.R. Horton team is producing strong results in fiscal 2017. In the third quarter, our consolidated pre-tax income increased 17% to $444.5 million on $3.8 billion of revenues, and the value of our net sales orders increased 13%. For the nine months ended June 30, 2017, our consolidated pre-tax income, homebuilding revenues and homes closed increased 21%, 18% and 16%, respectively, and our pre-tax profit margin improved 30 basis points to 11.2%. These results reflect the strength of our experienced operational teams, diverse product offerings from our family of brands and solid market conditions across our broad national footprint.

“Our balance sheet strength, liquidity and continued earnings growth and cash flow generation are increasing our flexibility, and we plan to maintain our disciplined, opportunistic position to improve the long-term value of our company. We remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while continuing to generate positive annual operating cash flows and improved returns. With 27,600 homes in inventory at the end of June and a robust supply of owned and controlled lots, we are well-positioned for the fourth quarter and fiscal 2018.”

Dividends

The Company has declared a quarterly cash dividend of $0.10 per common share. The dividend is payable on August 23, 2017 to stockholders of record on August 9, 2017.

Share Repurchase Authorization

Subsequent to quarter-end, the Company’s Board of Directors authorized the repurchase of up to $200 million of the Company’s common stock effective through July 31, 2018, which replaced the prior authorization.

Forestar Acquisition

On June 29, 2017, the Company entered into a definitive merger agreement with Forestar Group Inc. (Forestar) (NYSE:FOR), a publicly-traded residential real estate development company, to acquire 75% of the currently outstanding shares of Forestar for $17.75 per share in cash or approximately $560 million of total cash consideration. The strategic relationship between D.R. Horton and Forestar will significantly grow Forestar into a large, national residential land development company, selling lots to D.R. Horton and other homebuilders. Forestar will remain a public company with access to the capital markets to support its future growth. The proposed merger accelerates D.R. Horton’s strategy of expanding its relationships with land developers and ultimately increasing the optioned portion of its land and lot position to enhance operational efficiency and returns. The transaction is expected to close during the Company’s first quarter of fiscal 2018, subject to the approval of Forestar shareholders and other customary closing conditions.

Conference Call and Webcast Details

The Company will host a conference call today (Wednesday, July 26th) at 8:30 a.m. Eastern Time. The dial-in number is 877-407-8033, and the call will also be webcast from the...


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