D.R. Horton (NYSE: DHI), the largest homebuilder in the U.S., reported strong financial results despite a general decline in new home sales. For the second fiscal quarter ending March 31, 2023, the company generated $7.6 billion in revenue, exceeding analyst expectations, and net income of $647.9 million, translating to $2.24 per diluted share. New home orders rose 11% to 24,992, with an order value of $9.2 billion, while backlog grew to 16,882 homes valued at $6.4 billion.
Despite a market downturn with monthly new home sales down approximately 30% from previous peaks, D.R. Horton managed to close 19,486 homes, a 1% increase from the prior year. The company’s inventory strengthened, with unsold homes decreasing by 35% year-over-year and a stable cancellation rate of 16%. D.R. Horton raised its full-year revenue guidance to between $33.5 billion and $34.5 billion, anticipating sales of 86,000 to 87,500 homes, marking an improvement over fiscal 2025.
While the stock price rose 12% over the last three months, analyst sentiment remains cautious with a consensus rating of “Hold” from 16 analysts. Concerns about affordability and ongoing sales incentives may compress margins and limit earnings, leading some to view D.R. Horton as operating within a speculative sector amid significant market headwinds.
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