D.R. Horton, Inc. (NYSE:DHI) this morning reported a net loss of $1.3 billion (-$4.14 per diluted share) for its second fiscal quarter ended March 31. The results missed Wall Street estimates by a wide margin; analysts were expecting a loss of 43 cents per share.
Included in the loss were $834.1 million in inventory impairments and write-offs of deposits and pre-acquisition costs related to abandoned land option contracts and a $714.3 million charge against deferred tax assets.
Home building revenue fell 38.5% to $1.6 billion as homes closed fell 31.4% to 6,719. The operating loss from home building was $896.5 million.
Net sales orders for the quarter fell 24.6% to 7,528 homes with an aggregate value of $1.7 billion, down 34.6% from $2.6 billion for the same quarter of fiscal 2007. The cancellation rate was 33%.
Net sales orders for the first six months of fiscal 2008 fell 36.3% to11,773 homes with an aggregate value of $2.6 billion, down 47% from $4.9 billion for the same period of fiscal 2007, indicating price pressure in the moribund market for new homes.
Horton's backlog of homes under contract at March 31 was 8,947 homes valued at $2.1 billion) compared to 16,885 homes with a value of $4.8 billion on March 31, 2007. It ended the quarter with net cash and cash equivalents of$560.9 million
For the six months ended March 31, 2008, the Company reported a net loss totaling $1.4 billion (-$4.55 per diluted share). The six-month results included pre-tax charges of $1.1 billion in inventory impairments and write-offs. Homebuilding revenue for the six months ended March 31, 2008 totaled $3.3 billion, compared to $5.4 billion for the same period of fiscal 2007. Homes closed in the six-month period totaled 13,268, a 33.6% drop compared to 19,994 homes closed in the same period of fiscal 2007.
Horton chairman Donald R. Horton said in a statement, "Although market conditions in the homebuilding industry remain challenging, we continue to focus on reducing inventory and generating cash flow from operations. We reduced our homes in residential inventory to approximately 15,100 homes at the end of March, down approximately 13% from the end of December. We generated approximately $450 million of cash flow from operations this quarter and exceeded our fiscal year goal of at least $1 billion in only six months. We ended the quarter with a homebuilding cash balance of $519 million. We also maintained our focus on controlling our costs, reducing our homebuilding SG&A expenses by approximately $88 million in our quarter ended March 31, 2008, compared to the year ago quarter."
Shares of D.R. Horton opened down 53 cents, or approximately 3%, at $15.45 on the New York Stock Exhange, but recovered to $15.62 during the first five minutes of trading.