D.R. Horton Surges as Orders Beat Pushes Shares to Record High
(Bloomberg) -- Homebuilder D.R. Horton Inc. reported quarterly orders that beat analysts’ estimates, sending its shares to a record high.
- In the three months through September, purchase contracts jumped 14% from a year earlier to 13,130, the Arlington, Texas-based company said in a statement Tuesday. Analysts surveyed by Bloomberg were expecting a gain of 7.9%. The company also posted higher than expected profit and boosted its dividend, sending its shares higher.
- D.R. Horton was one of the first builders to focus on lower-cost homes for millennials, and that’s paying off. The company is filling a hole in the market left by a severe shortage of entry-level existing homes, and the higher prices charged by its peers.
- This year’s drop in mortgage rates has given D.R. Horton an especially big boost because many of its buyers are former renters who otherwise might not have been able to afford a purchase. The cheaper borrowing costs have boosted the overall industry, including builders selling more expensive trade-up homes like PulteGroup Inc.
- D.R. Horton’s results were particularly impressive given some tough year-over-year comparisons. While some builders saw orders weaken last year, D.R. Horton’s results remained relatively strong. The company has maintained profit margins, taking advantage of lower lumber costs.
- The shares jumped as much as 5.7% to $55.67 on Tuesday. It’s the biggest intraday gain in more than three months and pushed the stock to its highest level since the company went public in 1992.
- Click here to read D.R. Horton’s earnings statement.
©2019 Bloomberg L.P.