D.R. Horton Reports Q4 Earnings Below Estimates Despite $9.4 Billion Revenue, Shares Fall 4.2%

D.R. Horton (NYSE:DHI) reported fourth-quarter fiscal 2026 earnings below analysts’ expectations on Thursday, although revenue exceeded forecasts. Shares of the U.S. homebuilder declined 4.2% following the announcement.

Adjusted earnings per share were $2.67, compared with the consensus estimate of $3.01. Quarterly revenue reached $9.4 billion, exceeding analysts’ expectations of $9.07 billion.

The company cited higher mortgage rates, housing affordability constraints and cautious consumer sentiment as factors affecting demand for new homes.

Fourth-Quarter Net Income Declines 18%

Net income attributable to D.R. Horton decreased 18% to $741.8 million during the fourth quarter.

Consolidated pre-tax income totaled $1.0 billion, representing a pre-tax profit margin of 10.8%.

The quarterly results included $91.4 million in inventory impairment charges associated with the company’s rental segment.

Home sales revenue declined 2% to $8.4 billion, with the company closing 22,915 homes during the period.

Net sales orders decreased 7% to 18,619 homes, while their total value fell 9% to $6.6 billion.

The cancellation rate increased to 23%, compared with 20% in the corresponding quarter of the previous year.

Housing Affordability and Mortgage Rates Affect Demand

D.R. Horton reported that housing market conditions became more difficult during the fourth quarter, with mortgage rates and affordability influencing buyer activity.

Executive Chairman David Auld commented:

“Housing market conditions became more challenging during the fourth quarter as rising mortgage rates, affordability constraints and cautious consumer sentiment continued to pressure new home demand.”

Addressing the company’s expectations for the coming year, Auld added:

“We expect incentives to remain elevated in fiscal 2027, the extent of which will depend on market conditions throughout the year.”

The company indicated that its use of sales incentives will continue to depend on developments in the housing market.

Fiscal 2027 Revenue Forecast Set at $30 Billion to $32 Billion

For fiscal 2027, D.R. Horton expects consolidated revenue between $30.0 billion and $32.0 billion.

The midpoint of the guidance range is $31.0 billion.

The company anticipates closing between 79,000 and 84,000 homes during the fiscal year, compared with 84,202 homes completed in fiscal 2026.

D.R. Horton also forecasts operating cash flow of approximately $3.5 billion.

Planned shareholder returns include around $3.0 billion in share repurchases and approximately $500 million in dividend payments.

Full-Year Net Income Falls 19% to $2.9 Billion

For fiscal 2026, D.R. Horton reported net income of $2.9 billion, representing a decline of 19% from the previous year.

Diluted earnings per share totaled $10.11.

The company generated $3.5 billion in operating cash flow and returned $4.1 billion to shareholders during the year.

Shareholder distributions comprised $3.6 billion in share repurchases and $513.3 million in dividends.

D.R. Horton’s board also approved an 11% increase in the quarterly dividend to $0.50 per share.

The company’s fiscal 2027 outlook reflects expectations for continued use of buyer incentives as it responds to mortgage rates, affordability conditions and demand across its housing markets.

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