D.R. Horton Inc., the largest U.S. homebuilder, reported fiscal second-quarter earnings that beat analysts' estimates as it increased sales amid a tight inventory of properties on the market.
Net income for the three months through March climbed to $195.1 million, or 52 cents a share, from $147.9 million, or 40 cents, a year earlier, the Fort Worth, Texas-based company said in a statement on Thursday. The average estimate of 16 analysts was for earnings of 46 cents a share, according to data compiled by Bloomberg. D.R. Horton raised its full-year pretax profit margin estimate.
D.R. Horton has boosted sales volumes with the help of its entry-level
"Horton's early push into the entry-level has given them an early-mover advantage relative to peers, which, until more recently, have focused almost exclusively on the move-up segment," Drew Reading, a Bloomberg Intelligence analyst, wrote in an email before the company announced its results. "Their view, which has been validated, was that a lack of inventory at affordable price points was holding back demand."
Homebuilding revenue rose 16% to $2.7 billion in the second quarter from a year earlier, D.R. Horton said. Home sales completed in the quarter climbed 12% to 9,262, and orders increased 10% by volume. D.R. Horton forecasts full-year pretax profit margin in a range of 10.7% to 11.2% compared with prior guidance of 10.5% to 11%. The second-quarter margin widened by 130 basis points to 10.9%, the company said on Thursday.
"Solid performance in our three core brands is enabling us to capitalize on market opportunities and expand our industry-leading market share," Chairman Donald Horton said in the statement. "We are well-positioned for the second half of fiscal 2016."
