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D.R. Horton Increases Sales but Misses Estimates on Earnings

D.R. Horton (NYSE: DHI  ) reported earnings on July 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q3), D.R. Horton missed estimates on revenue and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share improved significantly.

Margins increased across the board.

Revenue details
D.R. Horton chalked up revenue of $1.15 billion. The 14 analysts polled by S&P Capital IQ foresaw a top line of $1.19 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $999.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.20. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.21 per share. GAAP EPS of $2.22 for Q3 were much higher than the prior-year quarter's $0.09 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 18.5%, 170 basis points better than the prior-year quarter. Operating margin was 6.6%, 120 basis points better than the prior-year quarter. Net margin was 68.5%, 6,560 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.39 billion. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $4.35 billion. The average EPS estimate is $0.63.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 568 members out of 1,137 rating the stock outperform, and 569 members rating it underperform. Among 335 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 141 give D.R. Horton a green thumbs-up, and 194 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on D.R. Horton is outperform, with an average price target of $17.98.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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5/31/2016 3:42 PM
DHI $30.56 Down -0.03 -0.08%
D.R. Horton, Inc. CAPS Rating: ***