Home builder D.R. Horton Inc. today announced net income of $292.8 million, which is 21.2 percent lower than third-quarter 2005 net income of $371.7 million.
The company reported earnings of 93 cents per diluted share, compared with $1.17 per diluted share in third-quarter 2005.
For the nine months of the fiscal year (through June 30), net income increased 5 percent to $955.6 million ($3.02 per diluted share), compared with $906.7 million ($2.85 per diluted share) in third-quarter 2005.
Net sales orders for the quarter ended June 30 totaled 14,316 homes ($3.8 billion), compared with 14,980 homes ($4.1 billion) for the same quarter in the 2005 fiscal year. Net sales orders for the first nine months of fiscal 2006 increased 6 percent to 41,550 homes ($11.4 billion), compared with 39,282 homes ($10.9 billion) for the same period of fiscal 2005, according to the earnings announcement.
The company’s backlog of homes under contract at June 30 increased 4 percent to 24,956 homes ($7.4 billion), compared with 23,916 homes ($7 billion) on June 30, 2005.
Third-quarter results reflect a pre-tax charge of $57.2 million (11 cents per diluted share) to write off earnest money and pre-acquisition costs related to land option contracts, the company reported. Consolidated revenue for the quarter increased 9 percent to $3.7 billion, from $3.4 billion in third-quarter 2005. Homes closed in the quarter increased 9 percent to 13,377 homes from 12,269 homes in the year-ago quarter.
Consolidated revenue for the nine months increased 16 percent to $10.2 billion, from $8.8 billion for the same period of fiscal year 2005. Homes closed in the nine-month period increased 10 percent to 35,838 homes from 32,550 homes for the same period of fiscal year 2005.
Home sales revenues increased from $3.3 billion in third-quarter 2005 to $3.6 billion in third-quarter 2006, and grew from $8.4 billion for the first nine months of the 2005 fiscal year to $9.8 billion for the first nine months of the 2006 fiscal year.
Meanwhile, gross profit for home sales dropped from $863.4 million in third-quarter 2005 to $792.7 million in third-quarter 2006. And gross profit for home sales rose from $2.2 billion in the first nine months of the 2005 fiscal year to $2.4 billion in the first nine months of the 2006 fiscal year.
Donald R. Horton, board chairman, said in a statement that “selling conditions are very difficult in the home-building industry. We have experienced a changing home sales environment since the beginning of the calendar year, which became more evident during our third quarter.
“As we indicated when we reported our net sales orders last week, 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. Due to these factors, last week we reduced our guidance for fiscal year 2006 to $3.65 per diluted share or greater (based on approximately 317 million diluted shares) on approximately 50,000 homes closed.”
D.R. Horton Inc. is the largest homebuilder in the United States, delivering more than 51,000 homes in the fiscal year ended Sept. 30, 2005. Founded in 1978 in Fort Worth, Texas, D.R. Horton builds in 83 markets in 27 states in the Mid-Atlantic, Midwest, Southeast, Southwest and Western regions.
The sales prices of D.R. Horton homes range from $90,000 to more than $900,000, the company announced. D.R. Horton also provides mortgage financing and title services through its subsidiaries.
A Webcast of the company’s third-quarter earnings conference call is available at the “Investor Relations” page of the company’s Web site, at www.DRHorton.com.