Shares of D.R. Horton ($DHI) experienced a notable surge on Thursday, following the unexpected year-over-year growth in the homebuilder's fiscal third-quarter results. The company's revenue rose to $9.97 billion for the quarter ending June 30, an increase from $9.73 billion during the same period last year.
This figure surpassed the average analyst estimate of $9.61 billion as compiled by Capital IQ. Earnings per share improved to $4.10, up from $3.90, exceeding the GAAP consensus of $3.79. For homebuilding, revenue saw a 6% increase, amounting to $9.24 billion, as the number of homes closed rose by 5% to reach a total of 24,155 units.
In addition, orders inched up by 1%, concluding the quarter with 23,001 homes, holding steady in value at $8.7 billion. Notably, D.R. Horton shares were up by 11% in midday trading, reflecting investor optimism. Executive Chairman David Auld commented on the current market dynamics, stating, "Although inflation and mortgage interest rates remain elevated, the supply of both new and existing homes at affordable price points is still limited.
Additionally, the demographics supporting housing demand continue to be favorable." Contributing to its diverse revenue streams, D.R. Horton reported its rental operations generated $413.7 million, a decline from $667.1 million recorded in the third quarter of 2023. Financial services revenue improved slightly, rising to $242.3 million compared to $228.5 million from the previous year. In alignment with prevailing market conditions and performance thus far in the fiscal year, the company updated its consolidated revenue guidance.
D.R. Horton now anticipates revenue to fall within the range of $36.8 billion to $37.2 billion for fiscal 2024. This marks a revision from its prior forecast, which projected revenue between $36.7 billion and $37.7 billion. The consensus among market observers estimates revenue to be around $36.9 billion for the ongoing fiscal period. In terms of operational forecasts, the company aims for the number of homes closed in its homebuilding segment to fall between 90,000 and 90,500 units for this year, adjusting from its previously stated expectation of 89,000 to 91,000 homes. Recent stock performance shows a price of $174.11, reflecting a change of +16.60, marking a percentage change of +10.54.
The overall sentiment among investors is optimistic as D.R. Horton navigates the challenges within the housing market effectively..