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StockBeat - D.R. Horton Sparks Wobble in Homebuilders on Gloomy Revenue Outlook

Stock MarketsApr 25, 2019 01:41PM ET
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Investing.com - Homebuilder D.R. Horton fell sharply on Thursday after its better-than-expected quarterly results were offset by pessimistic outlook on revenues.

DR Horton (NYSE:DHI) said it expects revenue between $16.7 billion and $17 billion, below Capital IQ's consensus of $17.2 billion, sending its share price more than 4% lower. The shares had reached a 52-week high of $47.02 on Wednesday before falling back. They're still up 25% year-to-date.

D.R. Horton reported earnings of $0.93 a share for the quarter on revenue of $4.13 billion, beating estimates from Investing.com for earnings of $0.87 on revenue of $4.04 billion.

The above-consensus report was supported by an uptick in the number of homes delivered in the quarter.

The company delivered 13,480 homes for the quarter, up 10% from a year earlier. Net sales for orders rose to 16,805 homes valued at $4.9 billion from 15,828 homes valued at $4.7 billion a year earlier and ahead of expectations for 16,695 homes.

D.R. Horton said it expects to deliver between 55,000 homes and 56,000 homes in 2019, above Wedbush Securities' forecast for 54,000 homes.

Some on Wall Street, however, appear willing to give the homebuilder the benefit of the doubt.

"Unlike more diversified builders, DHI has a strong presence with affordable communities and a large land inventory," said CFRA, an independent research provider with a strong buy rating on the stock.

"As a conservative operator, we believe DHI will manage pace and price, and it has ample land to match the higher pace of demand for entry level homes."

Still, Horton's subdued outlook on full-year revenue triggered a selloff across homebuilders as Lennar (NYSE:LEN), KB Home (NYSE:KBH) and PulteGroup (NYSE:PHM) fell sharply, pressuring the SPDR S&P Homebuilders (NYSE:XHB) ETF 0.9% lower.

StockBeat - D.R. Horton Sparks Wobble in Homebuilders on Gloomy Revenue Outlook
 

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Susan Chen
Susan Chen Apr 26, 2019 2:52AM ET
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we are in a bubble
 
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