Market Overview - U.S. stocks experienced a decline, with the Nasdaq Composite falling 1.5% amid President Trump's tariff threats related to the Greenland dispute [1] - The Dow decreased by 1.17% to 48,780.92, while the S&P 500 dropped 1.32% to 6,848.33 [1] - European shares also fell, with the eurozone's STOXX 600 down 0.92% and major indices in Spain, London, Germany, and France experiencing declines [8] Company Earnings - D.R. Horton, Inc. reported net income of $594.8 million, or $2.03 per diluted share, for Q1 of fiscal 2026, down from $844.9 million, or $2.61 per diluted share, in the same quarter last year [3] - Revenue for D.R. Horton was $6.887 billion, a decrease from $7.613 billion year-over-year, but exceeded the consensus estimate of $6.603 billion [4] Stock Movements - Rapt Therapeutics Inc shares surged 64% to $57.52 following GSK's announcement of an acquisition [9] - Corvus Pharmaceuticals Inc shares increased by 107% to $16.66 after positive clinical trial results [9] - Immunitybio Inc shares rose 23% to $6.78 after a meeting with the FDA regarding its application for a cancer treatment [9] - Bakkt Holdings Inc shares fell 19% to $17.42 after announcing a $300 million ATM equity program [9] - NovaBay Pharmaceuticals Inc shares dropped 45% to $8.07 following a stock offering announcement [9] - Synlogic Inc shares decreased by 38% to $0.70 after receiving a Nasdaq delisting notification [9] Commodities - Oil prices increased by 2% to $60.62, while gold rose by 3.6% to $4,759.30 [7] - Silver saw a significant increase of 7.1% to $94.845, whereas copper fell by 0.8% to $5.7845 [7]

Shares of D.R. Horton, Inc. ( DHI ) have been a modest performer over the past year, gaining about 6% in what has been a challenging environment for homebuilders. Hopes for a housing market turnaround inOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure:I/we have no ...

Company Earnings Reports - 3M (MMM) reported Q4 earnings of $1.83 per share, slightly beating the Zacks consensus by $0.01, but revenues of $6.0 billion fell short of estimates of $6.08 billion, marking the 12th consecutive earnings beat, with both earnings and sales up year over year, yet shares are down -3.75% [4] - D.R. Horton (DHI) reported earnings of $2.03 per share, exceeding expectations of $1.95, and revenues of $6.89 billion surpassed estimates of $6.71 billion, indicating positive signs for the U.S. housing market, although shares are down -5.5% [5] - Fifth Third Bank (FITB) reported earnings of $1.12 per share and revenues of $2.34 billion, both outperforming expectations of $1.00 per share and $2.32 billion, marking 12 consecutive earnings beats, with shares down -1.5% but up +9% over the past year [6] Market Overview - Pre-market futures are declining due to global economic concerns, with the Dow down -700 points, S&P 500 down -106 points, and Nasdaq down -460 points, while bond yields have risen to +4.3% on the 10-year and +3.6% on the 2-year [3] - The upcoming earnings reports from Netflix (NFLX) and United Airlines (UAL) are anticipated, with NFLX expected to show +27.9% earnings growth year over year and UAL expected to report -8.6% earnings growth [7]

Financial Performance - Net income attributable to D.R. Horton decreased 30% to $594.8 million, with earnings per diluted share down 22% to $2.03[2] - Revenues for the three months ended December 31, 2025, were $6,886.9 million, a decrease of 9.5% compared to $7,613.0 million in the same period of 2024[27] - Net income attributable to D.R. Horton, Inc. for the three months ended December 31, 2025, was $594.8 million, down 29.5% from $844.9 million in 2024[27] - Basic net income per share for the three months ended December 31, 2025, was $2.03, a decrease of 22.8% compared to $2.63 in 2024[27] - Homebuilding pre-tax income decreased 30% to $708.1 million, with a pre-tax profit margin of 10.8%[9] - Income before income taxes for Q4 2025 was $798.1 million, down from $1,109.9 million in Q4 2024, representing a decrease of 28.0%[34] Revenue and Sales - Consolidated revenues for the first quarter were $6.9 billion, with home sales revenues of $6.5 billion from 17,818 homes closed[8] - Home sales revenue for Q4 2025 was $6,512.7 million, a decrease of 8.8% compared to $7,146.0 million in Q4 2024[34] - Total consolidated revenues for Q4 2025 reached $6,886.9 million, down from $7,613.0 million in Q4 2024, reflecting a decline of 9.6%[34] - Net sales orders increased 3% to 18,300 homes, with an order value of $6.7 billion[9] - Net sales orders for homes in Q4 2025 totaled 18,300 homes valued at $6,661.8 million, slightly up from 17,837 homes valued at $6,653.5 million in Q4 2024[39] - Homes closed in Q4 2025 were 17,818, with a total value of $6,512.7 million, compared to 19,059 homes valued at $7,146.0 million in Q4 2024, a decrease of 6.5% in volume[41] Cash Flow and Liquidity - Cash provided by operations totaled $854.0 million, and total liquidity at quarter end was $6.6 billion[3] - Net cash provided by operating activities increased to $854.0 million for the three months ended December 31, 2025, compared to $646.7 million in 2024, reflecting a 32.1% increase[29] - Cash provided by operating activities in Q4 2025 was $854.0 million, compared to $646.7 million in Q4 2024, showing an increase of 32.0%[34] - Cash, cash equivalents, and restricted cash at the end of the period were $2,553.0 million, down from $3,069.0 million at the end of the same period in 2024[29] Debt and Capital Structure - The Company's debt to total capital ratio was 18.8%, with $600 million of homebuilding senior notes maturing in the next twelve months[3] - The company incurred interest expenses of $56.5 million for the three months ended December 31, 2025, compared to $46.7 million in 2024, representing a 21.0% increase[27] Shareholder Returns - The Company repurchased 4.4 million shares for $669.7 million and paid cash dividends of $131.5 million during the quarter[13] - D.R. Horton, Inc. repurchased common stock worth $649.2 million during the three months ended December 31, 2025, compared to $1,055.7 million in the same period of 2024[29] Inventory and Assets - Total assets as of December 31, 2025, were $34,639.6 million, compared to $35,471.2 million as of September 30, 2025, indicating a decrease of 2.3%[31] - The total lots controlled by the company as of December 31, 2025, was 590,500, a decrease from 591,900 lots as of September 30, 2025[45] - Homes in inventory as of December 31, 2025, totaled 30,400, an increase from 29,600 homes as of September 30, 2025[49] Order Backlog and Cancellations - The cancellation rate for sales orders was 18%, consistent with the prior year quarter[9] - As of December 31, 2025, the sales order backlog consisted of 11,376 homes valued at $4,313.5 million, compared to 11,003 homes valued at $4,299.0 million as of December 31, 2024, indicating a slight increase in value[43]

I aim to invest in companies with perfect qualitative attributes, buy them at an attractive price based on fundamentals, and hold them forever. I hope to publish articles covering such companies approximately 3 times per week, with extensive quarterly follow-ups and constant updates.I manage a concentrated portfolio targeted at avoiding losers and maximizing exposure to big winners. This means that often I'll rate great companies at a 'Hold' because their growth opportunity is below my threshold, or their d ...

Group 1 - The increase in the 10-year Treasury yield is leading to higher mortgage rates, negatively impacting home-building related stocks [1] - The iShares U.S. Home Construction ETF experienced a 1.5% decline, marking its largest percentage drop since January 7 [1] - Major home builders such as D.R. Horton reported flat earnings, while Lennar and PulteGroup saw declines of 0.8% and 1.5% respectively [1] Group 2 - Builder stocks had previously benefited from optimism due to a decline in mortgage rates earlier in the month [2] - This decline in mortgage rates was influenced by a statement from President Donald Trump regarding Fannie Mae and Freddie Mac purchasing mortgage-backed securities [2]

FORWARD-LOOKING STATEMENTS Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the effect of D.R. Horton's controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our customers; th ...

Core Insights - D.R. Horton reported a revenue of $6.5 billion from home sales in the quarter, a decrease from $7.1 billion a year earlier, with 17,818 homes closed compared to 19,059 homes previously [1] - The company emphasized that demand is constrained by affordability, and it is adjusting its strategy by balancing pace, price, and incentives to drive sales while maintaining returns [2] - The average closing price of homes was $365,500, remaining flat sequentially but down 3% year over year [1] Financial Performance - D.R. Horton generated a consolidated pre-tax income of $798 million on $6.9 billion in revenue, resulting in a pre-tax profit margin of 11.6%. Net income was $595 million, with earnings per diluted share at $2.03, down from $2.61 in the prior-year quarter [3][4] - The company reported a gross margin of 20.4% for home sales, an increase of 40 basis points sequentially, attributed to a recovery of prior-period warranty costs [8] - Home sales revenue per square foot remained flat, while "stick-and-brick" costs decreased by 1% and lot costs increased by 2% [9] Sales and Orders - Net sales orders increased by 3% year over year to 18,300 homes, with an order value unchanged at $6.7 billion. The cancellation rate was 18%, consistent with the prior year [7] - The average price of net sales orders was $364,000, flat sequentially and down 2% year over year [7] Inventory and Land Strategy - D.R. Horton ended the quarter with 30,400 homes in inventory, including 20,000 unsold homes. The company started 18,500 homes in the December quarter, a 27% increase sequentially [14] - The lot position consisted of approximately 590,500 lots, with 25% owned and 75% controlled through purchase contracts. The company prefers to build on lots developed by others to enhance capital efficiency [15] Capital Returns and Financial Health - The company returned significant capital to shareholders, repurchasing 4.4 million shares for $670 million in the quarter and $4.4 billion over the past 12 months [5][19] - At quarter end, stockholders' equity was $24 billion, with a book value per share of $82.60, up 5% year over year. The company reported $6.6 billion in consolidated liquidity [20] Guidance - For the second quarter, D.R. Horton expects consolidated revenue of $7.3 billion to $7.8 billion and homebuilding closings of 19,700 to 20,200 homes. The company guided a home sales gross margin of 19% to 19.5% [22] - For fiscal 2026, the company reiterated expectations for consolidated revenue of approximately $33.5 billion to $35.0 billion and homebuilding closings of 86,000 to 88,000 homes [22]

Core Insights - D.R. Horton, Inc. (DHI) reported better-than-expected first-quarter fiscal 2026 results, with earnings and total revenues exceeding the Zacks Consensus Estimate, although both metrics declined year-over-year [1][4][10] Financial Performance - Earnings per share (EPS) were $2.03, surpassing the Zacks Consensus Estimate of $1.96 by 3.6%, but down 22.2% from $2.61 year-over-year [4] - Total revenues reached $6.89 billion, a decrease of 9.5% year-over-year, yet exceeded analysts' expectations of $6.71 billion by 2.7% [4] - The consolidated pre-tax profit margin was 11.6%, down from 14.6% a year ago [5] Segment Performance - Homebuilding revenues were $6.53 billion, down 9% from the prior-year quarter, with home sales at $6.51 billion, an 8.9% decline year-over-year [6] - Home closings decreased by 6.5% to 17,818 homes, while net sales orders improved by 2.6% year-over-year to 18,300 units [6] - The value of net orders slightly increased by 0.1% year-over-year to $6.66 billion, with a cancellation rate of 18%, consistent with the previous year [6] - The sales order backlog was 11,376 homes, up 3.4% year-over-year, with a backlog value of $4.31 billion, a 0.3% increase [7] Liquidity and Capital Management - D.R. Horton had cash, cash equivalents, and restricted cash totaling $2.55 billion as of Dec. 31, 2025, down from $3.03 billion at the end of fiscal 2025 [11] - Total liquidity was reported at $6.6 billion [11] - The company repurchased 4.4 million shares for $669.7 million during the fiscal quarter, with a remaining stock repurchase authorization of $2.6 billion [13] Guidance and Outlook - D.R. Horton expects consolidated revenues for fiscal 2026 to be in the range of $33.5-$35 billion, compared to $34.25 billion in fiscal 2025 [14] - Anticipated homes closed are projected to be between 86,000-88,000, up from 84,863 in fiscal 2025 [14] - The company expects cash flow from operations to be at least $3 billion, with an income tax rate of approximately 24.5% [14]

Core Viewpoint - D.R. Horton reported earnings that exceeded analysts' expectations, indicating strong performance in the home building sector, but also cautioned that potential buyers remain hesitant due to market conditions [1] Group 1: Company Performance - D.R. Horton’s earnings surpassed analysts' forecasts, showcasing the company's resilience in a challenging market [1] - The company highlighted that despite strong earnings, there is a notable caution among potential home buyers, which could impact future sales [1] Group 2: Industry Insights - The home building industry is experiencing a cautious sentiment among buyers, which may affect overall market dynamics and future growth [1]