D.R. Horton Inc., a large Fort Worth, Texas-based home builder, cut its 2006 earnings forecast Thursday due to the slower real estate market conditions. Quarterly home sales orders were down from a year ago, while orders in the first nine months of the fiscal year were up, the builder said.
Donald R. Horton, chairman, cited the “difficult selling conditions the home-building industry is experiencing.”
The company reported net sales orders of 14,316 homes for the third quarter ended June 30, representing $3.8 billion, compared with 14,980 homes, or $4.1 billion, for the same quarter of fiscal year 2005.
Net sales orders for the first nine months of fiscal year 2006 increased 6 percent to 41,550 homes, or $11.4 billion, compared with 39,282 homes, or $10.9 billion, for the same period of fiscal 2005.
“The current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets,” Horton said Thursday.
Due to these market conditions, the company now expects third-quarter earnings of approximately 93 cents per diluted share, and lowered its per-share forecast for the year to $3.65 on approximately 50,000 homes closed.
D.R. Horton shares (NYSE:DHI) were trading at $21.08 Friday morning, down 7.8 percent from Thursday.
The company will report third-quarter results and 2006 earnings projections during a conference call on July 20.
D.R. Horton operates in 83 markets in 27 states.