Horton Reports Banner Earnings Citing Robust Demand and Favorable Pricing

by devteam April 26th, 2013 | Share

Fort Worth based homebuilder D. R.rnHorton reported financial results for its second quarter that dwarfed resultsrnfrom a year earlier.  The company’s netrnincome for the quarter ended March 31 increased 173 percent to 111.0 million orrn$0.32 per diluted share compared to net income for the second quarter of 2012 ofrn$40.6 million or $0.13 per share.  Pretaxrnincome increased 236 percent to $142.1 million and its pre-tax income margin wasrnup 550 basis points to 9.9 percent of revenues. rn</p

Net sales orders rose 34 percent torn7,879 homes from 5,899 homes and closed transactions grew by 33 percent torn5,643 homes with a value of $1.4 billion, up 47 percent. The backlog in salesrnincreased 54 percent in numbers of homes, 9,553 compared to 6,189 a yearrnearlier, and 76 percent in the value of those homes, $2.4 billion up from $1.4rnbillion.</p

The company ended the quarter withrn$1.1 billion of homebuilding unrestricted cash and net homebuilding debt torntotal capital of 33.7%. Net homebuilding debt to total capital consists ofrnhomebuilding notes payable net of cash and marketable securities divided byrntotal equity plus homebuilding notes payable net of cash and marketablernsecurities. </p

Donald R. Horton, Chairman of thernBoard, said, the spring selling season was off to a strong start.  “Robust demand [is] driving higher salesrnvolumes and favorable pricing, which is reflected in the 14% increase in ourrnaverage selling price. We are in an excellent position to continue to meet increasedrnsales demand and aggregate market share with 15,800 homes in inventory andrn175,000 lots owned or controlled under option contracts, of which 58,000 lotsrnare fully developed. </p

“The improvement in many of ourrnoperating metrics accelerated this quarter, expanding our pre-tax income marginrnto 9.9% and increasing our pre-tax income 236% to $142.1 million. Our homesrnsold, closed and in backlog all increased by greater than 30% compared to thernyear-ago quarter, while the dollar values increased 52%, 47% and 76%,rnrespectively. With $250 million in pre-tax income through the first six monthsrnof the year, we have already exceeded our pre-tax profits for all of fiscalrn2012.” </p

Horton, which says it is the largestrnhomebuilder in the United States, currently operates in 77 markets in 26 statesrnthroughout the U.S.  In addition tornbuilding homes across several price points the company provides mortgagernfinancing and title services.   

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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