Quarterly results exceed forecasts as stock gains in pre-market trading
D.R. Horton Inc. (NYSE:DHI) shares rose about 1.5% in pre-market trading on Tuesday after the homebuilder reported third-quarter fiscal 2026 results that topped Wall Street expectations, although investors weighed a weaker full-year revenue outlook and lower year-over-year profit.
For the quarter ended 30 June, diluted earnings per share came in at $3.20, surpassing the consensus estimate of $2.97. Consolidated revenue reached $9.23 billion, ahead of analysts’ forecast of $9.14 billion.
Profit declines as housing market remains challenging
Despite outperforming expectations, D.R. Horton’s profitability weakened compared with the same period last year.
Net income attributable to the company declined 12% to $904.9 million, while diluted earnings per share fell 5% year over year to $3.20.
Pre-tax income totaled $1.2 billion, producing a pre-tax margin of 13.3%.
Home sales revenue increased 1% to $8.7 billion, supported by the closing of 23,983 homes, a 4% increase from the prior year. The company said deliveries finished “at the high end of our guidance range.”
Orders remain steady but cancellations increase
Net sales orders totaled 23,084 homes, with an aggregate value of $8.4 billion, broadly unchanged from the third quarter of fiscal 2025.
However, the cancellation rate increased to 20%, compared with 17% in the same period last year.
Executive Chairman David Auld said “affordability constraints and cautious consumer sentiment continue to impact new home demand” and the company expects “sales incentives to remain elevated during the fourth quarter, with incentive levels dependent on demand, mortgage rates and other market conditions.”
Company lowers full-year revenue outlook
D.R. Horton updated its fiscal 2026 guidance, forecasting revenue of between $32.5 billion and $33.0 billion, below the analyst consensus estimate of $33.81 billion.
The company also narrowed its projected homes closed to a range of 83,800 to 84,300 for the full year.
Capital returns and strong balance sheet remain in focus
During the quarter, D.R. Horton repurchased 4.2 million shares for $615.7 million and paid $127.1 million in cash dividends, returning a combined $742.8 million to shareholders.
Following quarter end, the company declared a quarterly dividend of $0.45 per share, payable on 13 August to shareholders of record on 6 August.
For the first nine months of fiscal 2026, net income declined 20% to $2.1 billion, while diluted earnings per share fell 13% to $7.45 on revenue of $23.7 billion.
The company ended the quarter with total liquidity of $6.1 billion and a debt-to-total-capital ratio of 23.0%.
D.R. Horton stock price
