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DR Horton Blasts Q1 Earnings Forecast, Boosts 2020 Revenue Guidance Amid Housing Market Rebound

DR Horton says 'good demand' and a limited supply of affordable homes will continue to support sales and earnings this year as the U.S. housing market surges to its strongest pace of growth in more than a decade.

DR Horton Inc.  (DHI) - Get D.R. Horton Inc. Report posted stronger-than-expected first quarter earnings Monday, and boosted its 2020 sales forecast as low mortgage rates and surging activity continue to support the U.S. housing market.

DR Horton said earnings for the three months ending in December, its fiscal first quarter, came in at $1.16 per share, up more than 52% from the same period last year and firmly ahead of the Street consensus forecast of 92 cents. Group revenues, the company said,  rose 14.2% to $4.02 billion, again beating analysts' estimates of a $3.77 billion tally.

Looking into its 2020 fiscal year, DR Horton said it sees full-year revenues in the region of $18.5 billion to $19.1 billion, and noted the "good demand" will bring 2020 home closures to between 60,000 and 61,500 units. 

“We continue to see good demand and a limited supply of homes at affordable prices across our markets, and economic fundamentals and financing availability remain solid," said CEO chairman Donald Horton. "With 30,200 homes in inventory at the end of December, we are well-positioned for the spring selling season and the remainder of fiscal 2020."

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“Our continued strategic focus is to grow our revenues and profits and consolidate market share, while generating strong annual operating cash flows and returns," he added. "Our balance sheet strength, liquidity and earnings growth provide us with significant financial flexibility, and we plan to maintain our disciplined, opportunistic approach to investing capital to enhance the long-term value of our company.”

DR Horton shares were marked 1.8% higher in early Monday trading following the earnings release to change hands at $59.30 each, a move that would extend the stock's six-month gain to around 36%.

December housing starts rose 16.9% from the previous month to a sixteen year high of 1.608 million units, Commerce Department data showed earlier this month, as low mortgage rates and tight supplies added to upward building pressures. 

Long-term U.S. mortgage rates hit the lowest levels in three months last week, according to Freddie Mac, with the average 30-year fixed falling 5 basis points to 3.6%, down from as high as 4.45% over the same period last year.