D.R. Horton Shares Slump as Pace of Home-Order Growth Slowsby
D.R. Horton Inc., the largest U.S. homebuilder, fell the most in three weeks after reporting fiscal first-quarter earnings that included slower-than-expected order growth.
Orders rose 9 percent, compared with a 35 percent jump a year earlier, the Fort Worth, Texas-based company said in a statement Tuesday. The average of four analyst estimates was for growth of 12.5 percent, and Megan McGrath, an analyst with MKM Holdings LLC, said she was expecting an increase of 15.5 percent.
“It wasn’t a bad earnings report, in our view, but if investors are worried about the economy, the slowdown in order growth may be worrying to people,” McGrath said in an e-mail.
The U.S. housing recovery lost momentum toward the end of 2015. New-home construction in the unexpectedly dropped in December, falling 2.5 percent to a 1.15 million annualized rate, according to the Commerce Department.
D.R. Horton shares fell 4.7 percent to close at $26.40. It was the biggest decline in the 13-member S&P Supercomposite Homebuilding index, which slipped 3.3 percent.
D.R. Horton’s net income for the three months through December climbed to $157.7 million, or 42 cents a share, from $142.5 million, or 39 cents, a year earlier. The average estimate of 16 analysts was 41 cents a share, according to data compiled by Bloomberg.
Homebuilding revenue rose to $2.4 billion in the first quarter from $2.3 billion a year earlier, D.R. Horton said. Home sales completed in the quarter climbed 1 percent to 8,061.