The loss of 41 cents per share missed Wall Street expectations for a loss of 25 cents per share, based on analysts’ opinion data provided by Thomson Financial Network.
It is the latest in a series of gloomy financial reports by builders. On Wednesday, builder Toll Brothers announced that home-building revenues dropped 22 percent year-over-year in the first quarter, and a day earlier builder Standard Pacific Corp. announced a $449.9 million net loss in the fourth quarter of the 2007 calendar year and a full-year net loss of $767.3 million.
D.R. Horton today reported $245.5 million in pre-tax charges related to inventory impairments and write-offs of deposits and pre-acquisition costs related to land-option contracts that the company will not pursue.
Home-building revenue was $1.7 billion in the first quarter, compared with $2.8 billion in the same quarter last year. The company reported net income of $109.7 million, or 35 cents per share, in the first quarter of the 2007 fiscal year.
D.R. Horton reported 6,549 home closings in the first quarter, compared with 10,202 homes for the same quarter last year.
Net sales orders totaled 4,245 homes valued at $900 million in the first quarter, compared with 8,771 homes valued at $2.3 billion in first-quarter 2007.
The company’s cancellation rate was 44 percent in the first quarter. D.R. Horton had a sales backlog of 8,138 homes under contract valued at $2 billion at the close of the first quarter, compared with 16,694 homes valued at $4.7 billion at the close of first-quarter 2007.
"Market conditions remained challenging in our December quarter as inventory levels of both new and existing homes remained high while pricing remained very competitive," said Donald R. Horton, the company’s chairman of the board, in a statement.
"Lending standards continue to be more restrictive than during the previous year, and buyers continued to approach the home-buying decision cautiously. We expect the housing environment to remain challenging."
The company has reduced its owned lots and homes in residential inventory by more than 10 percent since Sept. 30, he reported, and the company has a goal in the current fiscal year to generate at least $1 billion in cash flow from operations. In the first quarter, the company reported that it generated $550 million in cash flow from operations, primarily through a reduction in inventories.
The company’s earnings conference call is available at the investor relations page on the company’s Web site: www.drhorton.com. D.R. Horton, which delivered 41,000 homes in the 2007 fiscal year, has operations in 82 markets in 27 states. The sales price of its homes ranges from $90,000 to about $900,000. The company also provides mortgage financing and title services through subsidiaries.
D.R. Horton’s stock was trading at $15.10 per share as of 12:26 p.m. ET, up 29 cents compared to the Tuesday closing price.