{"id":49246,"date":"2017-01-24T17:58:17","date_gmt":"2017-01-24T23:58:17","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=49246"},"modified":"2017-01-24T18:01:58","modified_gmt":"2017-01-25T00:01:58","slug":"home-builder-d-r-horton-soars-on-better-than-expected-earnings","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/home-builder-d-r-horton-soars-on-better-than-expected-earnings\/","title":{"rendered":"Home builder D.R. Horton soars on better-than-expected earnings"},"content":{"rendered":"

By Zhu Zhu<\/strong><\/p>\n

Shares of D.R. Horton Inc., the largest U.S. homebuilder, surged nearly 6 percent Tuesday, as earnings and revenues handily beat analysts\u2019 expectations.<\/p>\n

Profit in the quarter ended Dec. 31, soared 31 percent to $206.9 million, from $158.9 million in the year-earlier quarter, far surpassing the analysts\u2019 concensus expectation of $179.8 million. The company\u2019s earnings per diluted share of 55 cents, exceeding Wall Street expectations of 48 cents.<\/p>\n

Revenue at the Fort Worth, Texas based homebuilder, jumped 20 percent to $2.8 billion from $2.4 billion, while the analysts\u2019 expectation was $2.7 billion.<\/p>\n

<\/p>\n

\u201cThese results reflect the diverse offerings across our broad international footprint, as well as solid mortgage condition,\u201d said David Auld, CEO at D.R. Horton in a conference call.<\/p>\n

\"Graph
Graph showing net income of D.R. Horton over time.(Source: Bloomberg)<\/figcaption><\/figure>\n

There is also more demand for housing in a growing economy, analysts said.<\/p>\n

\u201cThe increase in revenue is largely driven by the rising consumer demand in new homes. The demand is growing in the whole industry,\u201d said Brian Bernard, an analyst at Morningstar Inc.<\/p>\n

\u201cD.R. Horton has provided many affordable entry-level homes called Express Homes, which has an average price of about $215,000,\u201d Bernard said.<\/p>\n

Compared with the median existing single-family home sales\u2019 price of $233,500, the entry-level homes D.R. Horton provides are more affordable, said Bernard.<\/p>\n

In December, existing home sales decreased 2.8 percent to a seasonally adjusted annual rate of 5.49 million from November, according to a National Associations of Realtors report<\/a> Tuesday.<\/p>\n

The trend that more people are buying new homes will last at least until 2020, said Bernard. Even though interest rates have risen, people are getting higher wages and more job opportunities, which all make the new homes more affordable for them, Bernard added.<\/p>\n

D.R. Horton expressed some caution as the company enters a crucial home-selling period.<\/p>\n

\u201cDespite stronger earnings management reaffirmed its 2017 guidance, noting results significantly depend on the spring-selling season,\u201d Jade Rahmani, an analyst at an investment bank Keefe, Bruyette & Woods, said in a research note.<\/p>\n

For the 2017 forecast, the company expected double-digit annual growth in both revenue and pretax profit, Auld said in the conference call, unchanged from its previous outlook.<\/p>\n

Photo at top: Image from D.R.Horton’s website.<\/a> (Zhu Zhu\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Zhu Zhu Shares of D.R. Horton Inc., the largest U.S. homebuilder, surged nearly 6 percent Tuesday, as earnings and revenues handily beat analysts\u2019 expectations. Profit in the quarter ended Dec. 31, soared 31 percent to $206.9 million, from $158.9 million in the year-earlier quarter, far surpassing the analysts\u2019 concensus expectation of $179.8 million. The […]<\/p>\n","protected":false},"author":353,"featured_media":49247,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,3516],"tags":[],"class_list":["post-49246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2017"],"yoast_head":"\nHome builder D.R. 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