D.R. Horton, Inc. (NYSE:DHI) on Friday reported net income for its first fiscal quarter ended December 31, 2018 of $287.2 million, or $0.76 per diluted share, compared to $188.8 million, or $0.49 per diluted share, in the same quarter of fiscal 2018, an increase of 52%. Analysts polled by Dow Jones were expecting a gain of $0.78 per share.
The prior year quarter results included the impact of a higher effective tax rate primarily due to the remeasurement of the company’s deferred tax assets and liabilities as a result of the Tax Cuts and Jobs Act.
Home building revenue for the first quarter of fiscal 2019 increased 6% to $3.4 billion from $3.2 billion in the same quarter of fiscal 2018. Homes closed in the quarter increased 7% to 11,500 homes compared to 10,788 homes closed in the same quarter of fiscal 2018.
Net sales orders for the first quarter ended December 31, 2018 increased 3% to 11,042 homes compared to 10,753 homes in the same quarter of the prior year and were unchanged in value at $3.2 billion. The Company’s cancellation rat for the quarter was 24% compared to 22% in the prior year quarter.
The company had 33,700 homes in inventory at December 31, 2018, and its home building land and lot portfolio at December 31, 2018 was 309,400 lots, of which 42% were owned and 58% were controlled through option contracts.
The company ended the first quarter with $537.5 million of home building unrestricted cash and a home building debt to total capital ratio of 23.2%.
Donald R. Horton, Chairman of the Board, said, “Sales prices for both new and existing homes have increased across most of our markets over the past several years, which coupled with rising interest rates has impacted affordability and resulted in some moderation of demand for homes, particularly at higher price points. However, we continue to see good demand and a limited supply of homes at affordable prices across our markets, and economic fundamentals and financing availability remain solid. We are pleased with our product offerings and positioning for the upcoming spring selling season, and we will adjust to future changes in market conditions as necessary.
During the three months ended December 31, 2018, the company acquired the home building operations of Westport Homes, Classic Builders and Terramor Homes for $320.7 million. The assets acquired included approximately 700 homes in inventory, 4,500 lots and control of approximately 4,300 additional lots through option contracts. The company also acquired a sales order backlog of approximately 700 homes. Westport Homes operates in Indianapolis and Fort Wayne, Indiana, and Columbus, Ohio; Classic Builders operates in Des Moines, Iowa; and Terramor Homes operates in Raleigh, North Carolina.
