D.R. Horton Swings to Q4 Loss, But Beats Estimates

Nov.20.07 | About: D. R. (DHI)

Shares of D.R. Horton are higher in light pre-market trading at $11.75 (+4.4%), after reporting it swung to a fiscal Q4 loss of $50.1 million or $0.16/share, which is nowhere near the $0.66/share loss expected by the Street. Still, the company's outlook is pessimistic, as it expects the "housing environment to remain challenging." Last year D.R. Horton posted earnings of $277.7M ($0.88/share). Q4 homebuilding revenues fell 55% to $3.1B, but also were ahead of estimates of $2.9B. Backlog fell 48% to $2.7B. "D.R. Horton is going to be struggling for quite a few quarters to come simply because they entered this downturn with significantly more land than they'll need," commented a Morningstar analyst. In a more positive note, Chairman Donald R. Horton said, "Despite these challenging conditions, we exceeded our goal of generating $1 billion of cash flow from operations for the fiscal year, and all of our regions generated profits before impairments and land option cost write-offs for both the quarter and the fiscal year." (Earnings call transcript later today). Generating another $1B-plus of cash flow from operations in fiscal 2008 is listed as a goal, along with further inventory reduction, cost controlling and debt reduction. D.R. Horton lost 7.5% to $11.25 on Monday.

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.