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Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

D.R. Horton Warns on Profit

  • Summary: D.R. Horton announced that poor market conditions caused earnings for its fiscal third quarter (ending June 30) to come in at approximately 93 cents/share, down from $1.17/share a year ago. The warning came while the company issued its latest sales order report: 14,316 home orders for the quarter, down from 14,980 a year ago. While the housing market is broadly understood to be weakening, the warning from Horton is particularly significant as the company has been able to withstand previous downturns with minimal impact on profits, registering 114 consecutive quarters of year-over-year earnings growth. That remarkable streak appears to be broken.
  • Comment on related stocks/ETFs: The warning came after market close yesterday; in after hours trading, D.R. Horton (DHI) dropped 9%. The warning is likely to hit Toll Brothers (TOL) today as well -- it traded down over 3% after hours. Horton stock is down about 50% since the beginning of the year. Seeking Alpha contributor Bill R. had been wondering where Horton's income is coming from -- a prescient question, it seems.
Source: Homebuilder D.R. Horton Warns on Quarterly Profits; Stock Down 9% (DHI)