-- D.R. Horton's (DHI) fiscal second-quarter results came in better than expected, although the homebuilder tempered its full-year revenue outlook.
The company's net income per share dropped to $2.24 for the quarter ended March 31 from $2.58 a year earlier, but surpassed the FactSet-polled consensus of $2.13. Revenue fell to $7.56 billion from $7.73 billion, while analysts expected $7.55 billion.
The stock was up 7.7% intraday Tuesday, and has gained about 15% since the start of the year.
"New home demand remains impacted by affordability constraints and cautious consumer sentiment," Chief Executive Paul Romanowski said during an earnings call, according to a FactSet transcript. "However, our tenured teams continue to respond to current market conditions with discipline."
The company reduced its unsold inventory by 35% from a year ago, Romanowski said. D.R. Horton had 38,200 homes in inventory at the end of March, of which 22,900 were unsold.
The company is now projecting fiscal 2026 revenue in the range of $33.5 billion to $34.5 billion, with the top end revised from $35 billion. The Street's estimate indicates $33.29 billion. The company now expects 86,000 to 87,500 homes closed for the ongoing fiscal year, trimming the upper end from 88,000 units.
"We expect our sales incentives to remain elevated in fiscal 2026, with incentive levels dependent on demand, mortgage interest rates and other market conditions," Executive Chairman David Auld said in a statement.
The company's homebuilding revenue dropped 2% to $7.06 billion in the second quarter, while the number of homes closed rose 1% to 19,486 units. Net sales orders jumped 11% to 24,992 homes with an order value of $9.2 billion.
For the ongoing quarter, D.R. Horton expects revenue between $8.8 billion and $9.3 billion, Jessica Hansen, senior vice president of communications and people, told analysts on the call. Analysts are looking for third-quarter revenue of $8.95 billion.
"We recognize the current volatility and uncertainty in the broader economy, and we will continue to adjust to market conditions with discipline as we focus on enhancing the long-term value of D.R. Horton," Romanowski said.
Price: $165.63, Change: $+12.29, Percent Change: +8.01%