D.R. Horton Inc., the largest U.S. homebuilder by volume, reported fiscal third-quarter profit that beat analysts’ estimates as demand for homes increased.
Net income was $146 million, or 42 cents a share, for the three months ended June 30, compared with $787.8 million, or $2.22, a year earlier, when the Fort Worth, Texas-based company booked $716.7 million in non-cash deferred tax assets, according to a statement today. The average estimate of 17 analysts was 34 cents a share, according to data compiled by Bloomberg.
U.S. builders are benefiting as a tight inventory of existing properties boosts demand for new houses. Sales of new homes rose to an annual pace of 497,000 in June, a five-year high, the Commerce Department reported yesterday. D.R. Horton, under Chief Executive Officer Donald J. Tomnitz, has used its size advantage to reduce costs and increase market share by accelerating land purchases ahead of smaller competitors.
“Our homebuilding and financial services operations delivered strong results again this quarter,” Chairman Donald R. Horton said in the statement. Rising sales prices reflected “pricing power across most of our markets and increased demand from move-up buyers.”
D.R. Horton’s homebuilding revenue rose to $1.6 billion from $1.1 billion a year earlier. It sold 6,464 homes, up from 4,957.
The average price climbed to $268,000 from $225,000 a year earlier. Orders increased to 6,822 homes from 6,079.
The results were announced before markets opened. D.R. Horton fell 2.8 percent to $21.20 yesterday. The shares have gained 7.2 percent this year, compared with a 0.2 percent advance for the 11-company Standard & Poor’s Supercomposite Homebuilding Index.