D.R. Horton, Inc. (NYSE:DHI) before market open Tuesday reported a net loss of $799.9 million (-$2.53 per share) for its fiscal fourth quarter ended September 30, 2008. The net loss for the 2008 fiscal year was $2.63 billion (-$8.34 per share). Analysts were expecting a quarterly loss of $1.88 per share and a loss for the fiscal year of $7.70.
The loss for the quarter included $1.15 billion in write-downs, including$364.7 million in impairment charges for owned inventory, $624.2 million in impairment charges for land and lots that were sold during the quarter and$85.7 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. There also was a pre-tax charge to goodwill of $79.4 million.
Home sales revenue for the quarter was down 50% to $1.5 billion on 6,961 homes closed, compared to $3.0 billion on 11,733 homes closed in the same quarter of fiscal 2007. Net sales orders for the quarter fell 37.6% to 3,977 with a sales value of $852.3 million, down 34% from $1.3 billion for the same quarter of fiscal 2007. The cancellation rate for the quarter was 47%.Net sales orders for fiscal 2008 were 21,251 homes ($4.7 billion), compared to 33,687 homes ($8.2 billion) for fiscal 2007.
For the fiscal year ended September 30, 2008, Horton reported home sales revenue of $6.2 billion on 26,396 homes closed, compared to $10.7 billion in fiscal 2007 on 41,370 homes closed. Land and lot sales revenue in fiscal 2008 totaled $354.3 million, compared to $367.6 million in fiscal 2007.
Pre-tax charges for the year included $2.4 billion in inventory impairment charges and $111.9 million in write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Pre-tax goodwill impairment charges for the fiscal year totaled$79.4 million.
Land and lot sales revenue in the fourth quarter totaled $209.2 million, compared to $154.8 million in the same quarter of fiscal 2007. Approximately 32,000 lots were sold during the quarter, of which 55% were undeveloped, 20% were partially developed and 25% were fully developed. Horton owned approximately 99,000 lots at September 30, 2008.
Sales backlog of homes under contract at September 30, 2008 was 5,297 homes($1.2 billion), compared to 10,442 homes ($2.7 billion) at September 30, 2007.
Horton had $1.4 billion in cash on its books at Sept. 30, and the company said it expects a federal income tax refund of $622 million in December. Net cash provided by operating activities for fiscal 2008 was $1.9 billion, compared to $1.4 billion in fiscal 2007.
In the quarter, Horton repurchased a total of $36.7 million principal amount of its outstanding notes for a total purchase price of $36.7 million, plus accrued interest. Subsequent to September 30, 2008, it has repurchased a total of $102.9 million principal amount of its outstanding notes for a total purchase price of $98.2 million, plus accrued interest.
Donald R. Horton, chairman, said, "Market conditions in the homebuilding industry deteriorated during our fourth fiscal quarter and October, characterized by rising foreclosures, high inventory levels of both new and existing homes, increasing unemployment and eroding consumer confidence."Still, he said, "We plan to generate positive operating cash flow in fiscal 2009, in addition to the cash provided by our expected $622 million tax refund."
Shares of D.R. Horton closed up 38%, or $1.90 at $6.90, on heavy volume after having been up an astounding 47.2%, or $2.36, in late afternoon trading to $7.36 amid a rally across the builder group in the wake of the government's announcement that it would provide $800 billion to help unfreeze the market for mortgages and credit cards.