D. R. Horton (DHI) Misses Q1 EPS by 2c, Miss on Revenues; Affirms FY18 Revenue Mid-Point Guidance Below Consensus

D. R. Horton (NYSE: DHI) reported Q1 EPS of $0.49, $0.02 worse than the analyst estimate of $0.51. Revenue for the quarter came in at $3.2 billion versus the consensus estimate of $3.26 billion.

Fiscal 2018 First Quarter Highlights - comparisons to the prior year quarter

• Consolidated pre-tax income increased 23% to $391.2 million
• Consolidated pre-tax profit margin improved 70 basis points to 11.7%
• Net income attributable to D.R. Horton was $189.3 million or $0.49 per diluted share; includes a non-cash tax-related charge of $108.7 million
• Net sales orders increased 17% in value to $3.2 billion and 16% in homes to 10,753
• Homes closed increased 14% in value to $3.2 billion and 15% in homes to 10,788
• Increasing fiscal 2018 guidance for consolidated pre-tax profit margin to a range of 11.8% to 12.0%
• Increasing fiscal 2018 guidance for cash flow from operations to at least $700 million excluding Forestar

Guidance

D.R. Horton is updating its fiscal 2018 guidance as follows:

• Consolidated pre-tax profit margin of 11.8% to 12.0% compared to prior guidance of 11.5% to 11.7%
• Home sales gross margin in the range of 20% to 21%, with potential quarterly fluctuations that may be outside of this range
• Financial services operating margin of approximately 30%
• As previously announced on January 9, 2018, an income tax rate of approximately 26%, excluding the first quarter charge to reduce net deferred tax assets by $108.7 million
• Cash flow from operations of at least $700 million excluding Forestar, an increase of $200 million from initial guidance primarily due to recent tax legislation

D.R. Horton reaffirms its previously issued fiscal 2018 guidance for other metrics including:

• Consolidated revenues between $15.5 billion and $16.3 billion
• Homes closed between 50,500 and 52,500 homes
• Homebuilding SG&A expense of around 8.7% of homebuilding revenues
• Outstanding share count increase of less than 1%

GUIDANCE:

D. R. Horton sees FY2018 revenue of $15.5-16.3 billion, versus the consensus of $16.19 billion.

For earnings history and earnings-related data on D. R. Horton (DHI) click here.

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