D.R. Horton to Report Q1 Earnings: What's in Store for the Stock?

Core Viewpoint - D.R. Horton Inc. is expected to report a decline in earnings and revenues for the first quarter of fiscal 2025, with significant challenges stemming from high mortgage rates and inflationary pressures [1][4][9]. Revenue Estimates - The Zacks Consensus Estimate for D.R. Horton's earnings per share (EPS) is $2.40, reflecting a 14.9$2.82 [3]. - Total revenues are projected to be between $6.8 billion and$7.3 billion, down from $7.7 billion reported a year ago, indicating a year-over-year decline of approximately 7.7$6.69 billion due to a decrease in homes closed [6][5]. Segment Performance - The Homebuilding segment, contributing 89.5% of total revenues in the previous quarter, is anticipated to see a decline in closed homes, with estimates between 17,500 and 18,000 units, down from 19,340 units a year ago [5][6]. - Rental Property revenues are expected to be $184.5 million, reflecting a 5.6$197.3 million [8]. Margin Expectations - The home sales gross margin is expected to contract to 22.4% from 22.9% reported a year ago, influenced by inflation and supply chain concerns [9]. - Homebuilding selling, general and administrative (SG&A) expenses are expected to rise to approximately 8.9% of revenues, compared to 8.3% reported a year ago [10]. Orders and Backlog - Net sales orders are predicted to increase by 3.1% year over year to 18,629 units, while the backlog is expected to decrease to 13,032 units, down from 13,965 units a year ago [12]. - The value of the backlog is estimated to be $5.07 billion, indicating a decline of 6.8% year over year [12]. Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of +1.96% and a Zacks Rank of 4 (Sell) [13].