Yahoo Finance D.R. Horton Inc (DHI) Q2 2024 Earnings Call Transcript Highlights: Robust Growth Amid Market ...
Earnings Per Share (EPS): Increased to $3.52 per diluted share.
Revenue: Rose 14% to $9.1 billion.
Net Income: Reached $1.2 billion.
Pretax Income: Grew 23% to $1.5 billion.
Home Sales Revenue: Increased 14% to $8.5 billion.
Average Closing Price: $375,500, down 1% from the previous year.
Net Sales Orders: Increased 14% to 26,456 homes; order value up 17% to $10.1 billion.
Gross Profit Margin: On home sales revenue was 23.2%, up 30 basis points sequentially.
SG&A Expenses: As a percentage of revenues was 7.2%, down 10 basis points year-over-year.
Home Inventory: Ended the quarter with 45,000 homes, up 6% sequentially.
Rental Operations Revenue: $371 million from the sale of 1,109 single-family and 424 multifamily rental units.
Financial Services Revenue: $226 million, with a pretax profit margin of 34.6%.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the performance and market conditions in Florida given the increase in existing home inventory and higher insurance costs? A: (Paul J. Romanowski - President, CEO & Director) Florida's market remains robust despite rising insurance rates, particularly because most of D.R. Horton's sales are inland where insurance costs are more stable. The state continues to experience good job growth and migration, supporting housing demand, especially at affordable price points.
Q: How do multifamily and single-family rental operations impact the overall homebuilding operation in terms of costs and efficiencies? A: (Michael J. Murray - Executive VP & COO) The expansion into rental businesses allows D.R. Horton to be more efficient in land acquisition and usage, enhancing the company's ability to handle various aspects of land development. This integration helps in managing costs more effectively, particularly in traditional multifamily development.
Q: With recent CPI data and mortgage rate changes, how do you anticipate this affecting buyer demand and your incentive strategies? A: (Paul J. Romanowski - President, CEO & Director) D.R. Horton plans to continue adapting its incentive programs, such as interest rate buydowns, to align with market conditions and maintain sales pace. The company expects to maintain elevated incentive levels if mortgage rates remain high.
Q: Can you provide insights into the company's start pace and whether there might be adjustments based on current mortgage rates? A: (Michael J. Murray - Executive VP & COO) Start pace decisions are made at the community level based on market response and buyer interest rates. The company maintains flexibility in its operations to adjust to market conditions without a predetermined threshold for scaling back production based solely on mortgage rate changes.
Q: How are current economic conditions influencing your strategies for managing inventory and capitalizing on market opportunities? A: (Paul J. Romanowski - President, CEO & Director) D.R. Horton continues to focus on managing its inventory efficiently, aiming to match production with demand while optimizing returns. The company leverages its strong market position and broad geographic footprint to adapt to economic changes and capitalize on growth opportunities.
Q: What are your expectations for rental segment performance and its impact on overall financials? A: (Bill W. Wheat - Executive VP & CFO) The rental segment's performance is expected to remain stable, contributing positively to the company's financials. However, fluctuations in interest rates and market conditions could impact the timing and profitability of rental property sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
