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D.R. Horton, Inc. DHI reported mixed fourth-quarter fiscal 2025 (ended Sept. 30, 2025) results, with earnings missing Zacks Consensus Estimate, while the total revenues beat the same. On a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings. Besides, such a weak market scenario also impacted the backlog level of the company. Furthermore, soft contributions from the Forestar operations and the Financial Services segment added to the downtrend.
Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. This, alongside elevated selling, general and administrative expenses, is hurting the margins.
Nonetheless, the company’s strong liquidity, low leverage and national scale offer significant operational and financial flexibility. Its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positions D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.
It increased its quarterly dividend by 13% to 45 cents per share (or $1.80 per share annually), which is to be paid on Nov. 20, 2025, to shareholders as of Nov. 13.
Shares of this Arlington, TX-based homebuilder tumbled 7.3% following the earnings release on Tuesday.
DHI reported adjusted earnings of $3.04 per share, which missed the Zacks Consensus Estimate of $3.29 by 7.6%. The reported figure was down 22% year over year from adjusted earnings per share (EPS) of $3.92.
D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $9.68 billion, down 3.2% year over year. Contrarily, the reported figure surpassed the analysts’ expectation of $9.5 billion by 1.9%.
The consolidated pre-tax profit margin was 12.4% in the quarter, down from 17.1% a year ago.
Homebuilding revenues of $8.56 billion decreased 4% from the prior-year quarter. Home sales were $8.54 billion (below our model’s projection of $8.74 billion), down 4.4% year over year. Home closings were down 1% from the prior-year quarter to 23,368 homes.
Net sales orders improved 5% year over year to 20,078 (down from our projection of 21,239 units). The value of net orders increased year over year to $7.33 billion from $7.15 billion. The cancellation rate (on gross sales orders) was 20%, down from 21% a year ago.
As of Sept. 30, 2025, the sales order backlog of homes was 10,785 homes, down 11.5% year over year. Moreover, the value of the backlog was down 13.6% from the prior-year period to $4.12 billion.
Financial Services’ revenues decreased 1.7% from the year-ago level to $218.3 million (up from our expectation of $213.9 million).
Forestar contributed $670.5 million (up from our projection of $550.5 million) to total quarterly revenues with 4,891 lots sold. In the year-ago quarter, this segment contributed $551.4 million to total revenues on 5,374 lots sold.
The Rental business generated revenues of $805.4 million for the quarter (we had projected $422.2 million), up from $704.8 million a year ago.
Total revenues tumbled 6.9% to $34.25 billion, primarily due to a decline in home sales revenues (down 7.3% to $31.43 billion). Homes closed declined 5.4% to 84,863 units from fiscal 2024.
In fiscal 2025, the homebuilding pre-tax profit margin of 13.8% contracted 330 basis points from fiscal 2024.
During the fiscal year, the adjusted EPS of $11.57 declined year over year by 19.3% from $14.34.
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.03 billion as of Sept. 30, 2025, compared with $4.54 billion at the end of fiscal 2024. Total liquidity as of the fiscal fourth quarter was $6.6 billion.
At the end of fiscal 2025, the company had 29,600 homes in inventory, of which 19,600 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 591,900 lots at the end of the fiscal 2025. Of these, 25% were owned and 75% were controlled through land and lot purchase contracts.
At the end of the fiscal fourth quarter, the debt-to-total capital ratio was 19.8%. The trailing 12-month return on equity was 14.6%.
During fiscal 2025, D.R. Horton repurchased 30.7 million shares of common stock for $4.3 billion. As of Sept. 30, 2025, the company's remaining stock repurchase authorization was $3.3 billion.
The company expects consolidated revenues to be in the range of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025.
Homes closed are anticipated to be within 86,000-88,000, compared with 84,863 closed in fiscal 2025.
The cash flow provided by operations is expected to be at least $3 billion. The income tax rate is expected to be approximately 24.5%.
D.R. Horton currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. PHM has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.
The performance of PulteGroup was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues. Nonetheless, with a diversified business platform, PulteGroup aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.
KB Home KBH reported third-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly results highlighted ongoing challenges in a difficult housing market, reflecting pricing pressures across key regions. In response to weaker demand and the shortfall in orders, management adopted a cautious stance and revised its fiscal 2025 housing revenue guidance downward. KB Home is focused on expanding its build-to-order mix, reducing build times and enhancing customer satisfaction through affordable prices and personalization while maintaining strict cost controls.
Lennar Corporation LEN reported dismal results for the third quarter of fiscal 2025, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate. Also, both metrics tumbled on a year-over-year basis.
The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering the ASP adversely impacted revenue growth during the quarter. Nonetheless, Lennar is focusing on scale and technology investments to drive cost efficiencies. A strong balance sheet and disciplined execution are expected to support margin improvement as conditions stabilize.
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This article originally published on Zacks Investment Research (zacks.com).
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