NEW YORK -(Dow Jones)- D.R. Horton Inc. (DHI) posted a surprise fiscal second-quarter profit on a $59.2 million tax benefit, though the home builder's revenue was weaker than expected and closings and backlog declined.
Ft. Worth, Texas-based Horton, along with the rest of the industry, has struggled to sell homes during the lingering real-estate slump. Horton sells to many first-time buyers, who are struggling under tightened mortgage requirements and remain tempted by bargain-priced foreclosures. High unemployment and weak consumer confidence also remain stubborn issues.
"Market conditions in the homebuilding industry are still challenging," Chairman Donald R. Horton said in the pre-market release.
For the period ended March 31, D.R. Horton reported a profit of $27.8 million, or 9 cents a share, up from a prior-year profit of $11.4 million, or 4 cents a share. The latest quarter included a $59.2 million tax benefit and $14.3 million in charges from inventory impairments and land option cost write-offs. Revenue dropped 18% to $733.1 million.
Analysts polled by Thomson Reuters had most recently forecast 5-cent per-share loss on $761 million in revenue.
Ticonderoga Securities estimates the company would have lost three cents "when backing out the gives and takes."
Home-sales gross margin dropped to 16.2% from 18%.
The cancellation rate was 25%, up from 21% a year earlier but down from 28% in the first quarter. Closings decreased 18% and backlog dropped 16%.
Horton last year beat rival PulteGroup Inc. (PHM) for the nation's top builder spot by number of completed annual sales. Last year, Horton closed on 18,983 homes compared with Pulte's 17,095.
Reported by Dow Jones Newswires (April 29, 2011)
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