Homebuilder D.R. Horton ( DHI ) posted record second-quarter earnings and raised 2004 guidance Thursday.

The Texas-based company had net income of $188.6 million, or 80 cents a share, vs. $127.8 million, or 57 cents a share, a year ago. Analysts were expecting 71 cents a share. Revenue rose to $2.25 billion from $1.78 billion in the year-ago period.

Horton also raised full-year EPS guidance for its 2004 fiscal-year ending Sept. 10 to $3.45 to $3.55, safely above analysts' $3.44 a share consensus forecast, according to Thomson First Call.

The company's higher guidance follows the recent spike in market interest rates and growing expectations that the Fed will raise official interest rates sometime in the summer. Mortgage rates have also jumped lately, which has already cooled lending activity after several years of rock-bottom rates, which fueled an unprecedented housing boom.

Horton specializes in building homes for entry-level buyers and those who upgrade from their first home.

In the second quarter, the company's sales contract backlog increased 32% to a record $4.6 billion, while net sales orders increased 37% to $3.3 billion. The gains were spread across all regions of the U.S., with the Southeast and West regions leading the way.

Shares rose 59 cents, or 1/9%, to $31.50 on premarket trading.