D.R. Horton Inc (DHI) Q4 2024 Earnings Call Highlights: Strong Revenue Amid Market Challenges

GuruFocus News
4 min read

In This Article:

  • Revenue: $10 billion for the fourth quarter; $36.8 billion for the fiscal year.

  • Pre-Tax Income: $1.7 billion for the fourth quarter; $6.3 billion for the fiscal year.

  • Pre-Tax Profit Margin: 17.1% for both the fourth quarter and fiscal year.

  • Earnings Per Diluted Share: $3.92 for the fourth quarter; $14.34 for the fiscal year.

  • Net Income: $1.3 billion for the fourth quarter; $4.8 billion for the fiscal year.

  • Home Sales Revenue: $8.9 billion for the fourth quarter.

  • Gross Profit Margin on Home Sales: 23.6% for the fourth quarter.

  • Cash Flow from Operations: $2.2 billion for the fiscal year.

  • Share Repurchases: 12.5 million shares for $1.8 billion during the fiscal year.

  • Dividends Paid: $395 million during the fiscal year.

  • Return on Equity: 19.9% for the fiscal year.

  • Return on Assets: 13.9% for the fiscal year.

  • Net Sales Orders: 19,035 homes for the fourth quarter.

  • Average Sales Price of Net Sales Orders: $375,400 for the fourth quarter.

  • Cancellation Rate: 21% for the fourth quarter.

  • SG&A Expenses: 7.6% of revenues for the fourth quarter.

  • Homes in Inventory: 37,400 at year-end.

  • Rental Operations Revenue: $705 million for the fourth quarter; $1.7 billion for the fiscal year.

  • Financial Services Revenue: $222 million for the fourth quarter; $883 million for the fiscal year.

  • Financial Services Pre-Tax Profit Margin: 34.2% for the fourth quarter; 35.3% for the fiscal year.

  • Liquidity: $7.6 billion at year-end.

  • Debt: $5.9 billion at year-end.

  • Book Value Per Share: $78.12, up 15% from the prior year.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • D.R. Horton Inc (NYSE:DHI) reported solid financial results with a consolidated pre-tax income of $1.7 billion and revenues of $10 billion for the fourth quarter.

  • Earnings per diluted share for the year increased by 4% to $14.34, indicating strong profitability.

  • The company returned all of its generated cash flow to shareholders through repurchases and dividends, with share distributions increasing by approximately $700 million or 44% from the prior year.

  • D.R. Horton Inc (NYSE:DHI) has a strong balance sheet with low leverage and substantial liquidity, providing significant financial flexibility.

  • The company has improved its construction cycle times, positioning it to turn housing inventory faster in 2025.

Negative Points

  • Net income for the fourth quarter decreased by 15% to $1.3 billion, indicating a decline in profitability compared to the prior year.

  • The average closing price for homes in the fourth quarter was $377,600, down 1% both sequentially and from the prior year quarter.

  • The cancellation rate for the quarter increased to 21%, up from 18% sequentially, indicating potential buyer hesitancy.

  • Gross profit margin on home sales revenues in the fourth quarter was 23.6%, down 40 basis points sequentially due to higher incentive costs.

  • The company anticipates further increases in incentive levels on homes closed over the next few months, which could impact profit margins.

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