DR Horton Inc. (DHI - Get Report) posted weaker-than-expected first quarter earnings Friday, but revenue gains from higher selling prices and improved demand supported shares in early trading on Wall Street.
DR Horton said earnings for the three months ending in December, the group's fiscal first quarter, came in at 76 cents per share, up 55% from the same period last year but 2 cents shy of the consensus forecast. Group revenues, however, rose 5.6% to $3.52 billion as prices increased and completions rose 7% to 11,500 units.
"Sales prices for both new and existing homes have increased across most of our markets over the past several years, which coupled with rising interest rates has impacted affordability and resulted in some moderation of demand for homes, particularly at higher price points," said chairman Donald Horton. "However, 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."
"We are pleased with our product offerings and positioning for the upcoming spring selling season, and we will adjust to future changes in market conditions as necessary," Horton added.
DR Horton shares fell 2.6% to $37.30 by the close of trading on Friday.
The U.S. housing market has remained one of the domestic economies trouble spots over the final three months of last year and into the first weeks of 2019, thanks in part to a surfeit of homes for sale in key markets around the country and rising mortgage rates that have added to affordability concerns.
November housing starts, however, jumped 3.2% thanks to a big up-tick in multi-family buildings, but single-home sales slowed to the lowest level in 18 months.