D.R. Horton posts surprise 2nd-quarter profit | Phoenix News | Arizona News | azfamily.com | Business News

FORT WORTH, Texas (AP) — D.R. Horton Inc.'s fiscal second-quarter profit more than doubled mostly because of a large tax benefit, but the homebuilder reported lower revenue, fewer closings and a decline in orders.

Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.

D.R. Horton reported Friday its net income rose to $27.8 million, or 9 cents per share, for the period ended March 31, up from $11.4 million, or 4 cents per share, a year ago.

The results included a $59.2 million tax benefit offset in part by charges for inventory and land option cost writeoffs.
Analysts surveyed by FactSet expected a loss of 5 cents per share excluding unusual items.

Revenue fell 18 percent to $733.1 million from $896.8 million, missing Wall Street's estimate of $758.4 million.
D.R. Horton's stock gained 25 cents, or 2 percent, to $12.35 in pre-market trading.

Closings fell to 3,516 homes from 4,260 homes, while net sales orders dropped to 4,943 homes from 6,438 homes. The quarter's cancellation rate was 25 percent.

While closings and orders were soft, D.R. Horton said that it boosted inventory by 1,400 homes during the quarter to support increased demand for new homes during the popular spring selling season.

"We continue to focus on providing affordable homes for the first-time buyer while having product available for move-up buyers," Chairman Donald R. Horton said in a statement.

Builders got a spring sales lift last year thanks largely to federal tax credits that helped spur sales. But once the government incentive expired at the end of April, home sales cratered for much of the year.

This year, homebuilders don't have the government incentives as a sweetener to coax would-be homebuyers, many of whom remain deterred by high unemployment, strict lending standards and concerns that home values could drop further.

D.R. Horton anticipates that its closings and pre-tax profit will be higher during the second half of the fiscal year.

The company also declared a quarterly dividend of 3.75 cents per share. The dividend will be paid on May 24 to shareholders of record on May 12.

D.R. Horton, based in Fort Worth, Texas, has operations in 72 markets in 26 states. It sells homes with prices ranging from $90,000 to more than $700,000. The company also provides mortgage financing and title services through subsidiaries.

by Associated Press April 29, 2011


D.R. Horton posts surprise 2nd-quarter profit | Phoenix News | Arizona News | azfamily.com | Business News