D.R. Horton Expects Earnings To Be Down Again

DALLAS-D.R. Horton Inc., an 18-year-old, publicly traded homebuilder, which provides mortgage loans and title insurance to its customers, expects to report declining earnings for the second consecutive quarter. The firm will releases its first quarter 2007 numbers Jan. 23, industry sources speculate.

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.