The speculation is based on the company's latest disclosure showing net sales orders for the quarter totaled 8,771 homes valued at $2.3 billion compared to 11,463 homes valued at $3.2 billion in the comparable 2006 period. The company's cancellation rate for the quarter was 33%, an improvement from 40% in the last quarter of 2006. Horton's fiscal year ended Sept. 30, 2006. "Our people worked very hard to achieve these net sales orders during a time when the selling conditions in the homebuilding industry remain challenging," company chairman Donald Horton says in a statement.

The earnings disclosure is expected to reflect the company's ongoing order cancellation rate, according to industry sources. "Although our cancellation rate decreased in the first quarter of fiscal 2007 compared to the fourth quarter of fiscal 2006, we continue to experience higher than normal cancellation rates and increased use of sales incentives in many of our markets," Horton acknowledges.

For the fourth quarter of 2006 that ended Dec. 31, the New York Stock Exchange-traded company reported net income of $277.7 million or $0.88 per diluted share versus $563.8 million or $1.8 per diluted share in fourth quarter 2005. For the fiscal year, net income totaled $1.2 billion or $3.90 per diluted share compared to $1.5 billion or $4.62 per share in fiscal 2005.