D.R. Horton Inc., the largest U.S. homebuilder by revenue, reported a higher quarterly profit as it increased prices amid a nationwide housing recovery.
Net income was $139.5 million, or 40 cents a share, for its fiscal fourth quarter ended Sept. 30, compared with $100.1 million, or 30 cents, a year earlier, the Fort Worth, Texas-based company said in a statement today. The average estimate of 15 analysts was 40 cents a share, data compiled by Bloomberg show.
U.S. homebuilders have increased profit margins by cutting costs and raising prices as a tight supply of existing properties boosts demand. Purchases of new U.S. homes rose 7.9 percent in August from the previous month to a annual rate of 421,000, according to the Commerce Department.
“D.R. Horton is benefiting from pricing power across the industry,” David N. Williams, an analyst with Williams Financial Group in Dallas, said in a telephone interview before the results were released. “There’s such a lack of supply today that builders are able press the prices, and we have low interest rates so prices can escalate more.”
D.R. Horton’s fourth-quarter homebuilding revenue rose to $1.8 billion from $1.3 billion a year earlier. The company sold 6,866 homes, up from 5,575. The average price climbed 15 percent from a year earlier to $261,400.
Most of those sales were completed before mortgage rates rose two a two-year high in August, causing some would-be buyers to hold back. Orders in the quarter decreased 2 percent to 5,160 homes from a year earlier.
The results were announced before U.S. markets opened. D.R. Horton fell 0.4 percent to $18.06 yesterday. The shares have lost 8.7 percent this year, compared with a 7.1 percent decline for the 11-company Standard & Poor’s Supercomposite Homebuilding Index.
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