D.R. Horton tops Q4 revenue estimate as profit falls 12%

D.R. Horton, Inc. (DHI) said on Oct. 29 that revenue for its fourth quarter ended Sept. 30 was $9.37 billion, topping the $9.08 billion estimate compiled by Finnhub. Diluted earnings per share were $2.67, down 12% from a year earlier.

Shares rose 2.3% in after-hours trading as of 4:39 p.m. ET, from a regular-session close of $143.20.

Here's how the company did:

• Revenue: $9.37 billion vs. $9.68 billion a year earlier
• Net income attributable to D.R. Horton: $741.8 million vs. $905.3 million a year earlier
• Diluted EPS: $2.67 vs. $3.04 a year earlier

Pre-tax income for the quarter was $1.0 billion, a pre-tax profit margin of 10.8%. For the full fiscal year, net income attributable to the company fell 19% to $2.9 billion, and diluted earnings per share fell 13% to $10.11.

Executive Chairman David Auld said housing market conditions “became more challenging during the fourth quarter as rising mortgage rates, affordability constraints and cautious consumer sentiment continued to pressure new home demand.” He said the company expects incentives to remain elevated in fiscal 2027.

Segment results

Homebuilding revenue fell 2% to $8.4 billion in the quarter, on 22,915 homes closed, and homebuilding pre-tax income fell 11% to $891.0 million. Net sales orders decreased 7% to 18,619 homes. The cancellation rate was 23%, compared with 20% a year earlier.

The rental segment reported revenues of $647.1 million and a pre-tax loss of $25.3 million. That result includes $91.4 million of inventory impairment charges on nine multi-family rental projects.

Forestar sold 5,004 lots and generated $580.8 million of revenues and $78.6 million of pre-tax income. Financial services revenues were $219.2 million, with pre-tax income of $78.2 million.

Fiscal 2027 guidance

The company gave initial guidance for fiscal 2027 based on current market conditions:

• Consolidated revenues of $30.0 billion to $32.0 billion
• Homes closed by homebuilding operations of 79,000 to 84,000
• Income tax rate of approximately 25.5%
• Cash flow provided by operations of approximately $3.5 billion
• Share repurchases of approximately $3.0 billion
• Dividend payments of approximately $500 million

The filing does not include first-quarter fiscal 2027 guidance. The company said it would provide that guidance on its conference call on Oct. 29.

Capital returns

The company repurchased 24.0 million shares for $3.6 billion in fiscal 2026, including 9.4 million shares for $1.4 billion in the fourth quarter. It had $4.7 billion of stock repurchase authorization remaining at Sept. 30.

It declared a quarterly cash dividend of 50 cents per share, an increase of 11% from its most recent dividend paid. The dividend is payable on Nov. 19, 2026, to stockholders of record on Nov. 12, 2026. Auld said the increase makes fiscal 2027 “our thirteenth consecutive year of dividend growth.”

The company generated $3.5 billion of cash from operations in fiscal 2026 and ended the year with $7.2 billion of total liquidity. It repaid $600 million of 1.3% homebuilding senior notes at maturity in October 2026, and its debt to total capital ratio was 20.8% at year end.