The summary of the D.R. Horton (DHI) Q4 2023 Earnings Call, which took place on November 7, 2023, includes several key points:
- Introduction and Forward-Looking Statements: Jessica Hansen, Senior Vice President of Communications, initiated the call, highlighting that it contained forward-looking statements.
- Executive Team Remarks and Leadership Transition: David Auld, Executive Vice Chair, introduced the executive team, including Paul Romanowski, the new CEO, and discussed the leadership transition.
- Financial Performance Overview: The company reported strong Q4 results, with $4.45 earnings per diluted share and a 9% increase in revenues to $10.5 billion. The annual earnings per diluted share were $13.82, with $6.3 billion pre-tax income on $35.5 million revenue. A record of 91,204 homes and apartments were closed during the year.
- Operational Highlights and Market Conditions: Despite high mortgage rates and inflation, net sales orders increased by 39%. The company is focusing on affordable housing to consolidate market share and improve inventory turnover.
- Sales and Margin Performance: Fourth-quarter home sales were $8.8 billion. The average closing price was $382,900. Gross profit margin on home sales was 25.1%. The company anticipates using higher incentives, especially rate buydowns, in fiscal 2024 due to the current interest rate environment.
- Lot Supply and Investments: D.R. Horton’s lot position consists of approximately 568,000 lots, with investments in lots, land, and development totaling $2.3 billion in the fourth quarter.
- Rental Operations: The rental operations generated significant increases in revenues and profits, with $217 million of pre-tax income on $1.4 billion of revenues from the sale of rental homes and units in Q4.
- Financial Services and Capital Allocation: The financial services segment earned a pre-tax profit margin of 38.9% in Q4. The company plans to repurchase approximately $1.5 billion of common stock and anticipates dividend payments of around $400 million.
- Outlook for Fiscal 2024: For the first quarter of fiscal 2024, the company expects consolidated revenues of $7.4 billion to $7.6 billion and anticipates closing 18,500 to 19,000 homes. The full-year forecast includes consolidated revenues of approximately $36 billion to $37 billion, with homebuilding operations closing 86,000 to 89,000 homes.
- Closing Remarks: David Auld reflected on his tenure and the company’s positioning, expressing confidence in the team and future operations.
The call concluded with a Q&A session addressing various aspects of D.R. Horton’s performance and outlook.
