Stable demand for new homes during the last three months of 2014 led to a 16 percent increase in profit for the quarter for Fort Worth-based home builder D.R. Horton.
“We’re off to a great start,” David Auld, Horton’s president and CEO, said Monday during a conference call with Wall Street analysts on the company’s fiscal first-quarter earnings. “We’re looking forward to the spring. We’re in a strong competitive position for the spring.”
Income for the three months ended Dec. 31 was $142.5 million, or 39 cents a share, up 16 percent from the same period a year ago, when income was $123.2 million, or 36 cents a share. Revenue from home-building was $2.3 billion, up 38 percent. Analysts had forecast earnings of 34 cents a share.
In the quarter, Horton said its sales orders jumped 35 percent to 7,370 homes, closings increased 37 percent to 7,973 homes, and its sales order backlog increased 29 percent to 9,285 homes. Most of the growth has been in the East and Southeast U.S., where job growth has increased, Auld said.
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Shares of Horton (ticker: DHI) closed Monday at $24.38, up $1.28.
The average sales price of a home in the quarter was $281,000, up 7 percent, in part because home buyers are buying larger homes at slightly increased prices.
Declining oil prices, improved weather conditions and lower costs related to FHA loans could be improving housing markets, Auld said.
“Gas price is huge,” he said. “That’s money back into the economy every week. Texas has been stable despite the softening oil prices.”
Auld said the company is not feeling pressure from buyers to offer any more incentives than they were a year ago. Moreover, to meet the anticipated strong spring sales season, Horton has 1,000 more completed speculative homes than it did a year ago.
“Our weekly sales pace has accelerated in January, and we are well-positioned to capture demand in the spring selling season with our solid balance sheet and robust community count, finished lot supply and inventory of homes available for sale,” Chairman D.R. Horton said in a statement.
The quarter included a $6 million charge in inventory and land option charges for projects the company said it will no longer pursue, compared to $2.6 million in the year-ago quarter.
The company ended the quarter with $541 million in cash and cash equivalents on hand, compared to $860.8 million a year ago.
Sandra Baker, 817-390-7727