Homebuilder DR Horton Inc. (DHI) Tuesday reported a narrower loss for the third quarter of fiscal 2009, helped by lower charges and a benefit from provision for income taxes. However, quarterly revenues declined year-over-year reflecting lower home sales and weak net sales orders as market conditions in the homebuilding industry are still challenging.
The company's net loss was $142.3 million or $0.45 per share, compared with a net loss of $399.3 million or $1.26 per share in the year-ago quarter.
The latest quarter results included $110.8 million in pre-tax charges to cost of sales for inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the company does not intend to pursue. This compares with inventory impairments and land option cost write-offs of $330.4 million in the prior-year quarter.
Analysts polled by Thomson Reuters expected the company to report a loss of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.
For the preceding second quarter, the Fort Worth, Texas-based company's net loss was $108.6 million or $0.34 per share.
DR Horton's homebuilding revenue totaled $914.1 million in the quarter, down from $1.4 billion in the same quarter of fiscal 2008. Fifteen analysts had a consensus revenue estimate of $792.06 million for the quarter. Sequentially, the company's homebuilding revenue was higher than $775.3 million reported in the second quarter.
Home sales declined to $896.6 million from $1.42 billion a year ago. Land/lot sales were $17.5 million, slightly lower than $18.3 million reported in the same period last year.
During the quarter, the company closed 4,240 homes, compared with 6,167 homes in the year ago quarter.
Commenting on the results, Donald Horton, Chairman of DR Horton's Board, said, "Our net sales orders in the June quarter reflected a 22% sequential increase from our March quarter which was stronger than our usual seasonal trend. However, market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence."
As of June 30, 2009, the company's sales order backlog of homes under contract was 5,430 homes, compared with 8,281 homes at June 30, 2008. Net sales orders for the third quarter totaled 5,089 homes, lower than last year's 5,501 homes. Cancellation rate was 26% in the quarter.
DR Horton said it has declared a quarterly cash dividend of $0.0375 per share, payable on August 28 to stockholders of record on August 19.
For the nine months ended June 30, the company reported a net loss of $313.4 million, or $0.99 per share, narrower than a net loss of $1.83 billion, or $5.81 per share, a year ago. The nine-month results included pre-tax charges to cost of sales of $215.2 million of inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the company does not intend to pursue. Homebuilding revenue totaled $2.59 billion, down from $4.76 billion for the same period of fiscal 2008.
DR Horton's peer, Centex Corp. (CTX), has reported a profit of $85 million or $0.68 per share for the first quarter, helped by a tax benefit. The company, however, continued to post lower revenues, hurt by a 42% decrease in number of home closings and a 10% decline in average sales price. Revenues were down 49% to $574.0 million.
Another rival, Pulte Homes Inc. (PHM) yesterday posted a wider second-quarter loss, as revenue dropped on fewer home closings and lower average selling prices. The Bloomfield Hills, Michigan-based company's net loss was $189.5 million or $0.74 per share, compared with a net loss of $158.4 million or $0.63 per share, last year. Total revenue fell 58% in the quarter to $678.58 million from $1.62 billion in the same quarter of fiscal 2008.
On June 26, Lennar Corp. (LEN,LEN.B) reported a wider net loss for the second quarter, as it witnessed a 23% decline in home sales that reflected lower new home deliveries and a drop in average selling prices. The company's net loss was $125.19 million or $0.76 per share, compared with a net loss of $120.92 million or $0.76 per share, reported in the year-ago quarter. Total quarterly revenues fell to $891.85 million from $1.13 billion in the same quarter last year. The Miami, Florida-based company also stated that it is difficult to predict when the market would recover and said it continues to focus on returning to profitability.
DHI is trading at $11.50, down $0.25, on a volume of 3.15 million shares.
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