12:12 PM EDT, 10/29/2024 (MT Newswires) -- D.R. Horton ( DHI ) logged lower-than-expected fiscal fourth-quarter results on Tuesday, while the homebuilder issued downbeat revenue outlooks for the first quarter and 2025.

The company's earnings declined to $3.92 a share for the September quarter from $4.45 the year before, trailing the Capital IQ-polled consensus of $4.16. Revenue decreased 5% to $10 billion, missing the Street's view for $10.19 billion. The stock dropped 9.7% in midday trading.

Homebuilding revenue moved 2% higher to $8.95 billion, while the number of homes closed increased 3% to 23,647. Net sales orders ticked up 1% to 19,035 homes, despite affordability challenges and competitive market conditions, Executive Chairman David Auld said in a statement. The value of the orders declined 2% to $7.15 billion.

"Our sales pace was in line with normal seasonality from the third to fourth quarter but was below our expectations," according to Auld. "The supply of both new and existing homes at affordable price points is still generally limited, and demographics supporting housing demand are favorable."

D.R. Horton's ( DHI ) cancellation rate was 21% in the quarter, unchanged from the prior-year period. The company had 37,400 homes in inventory at the end of September, of which 25,700 were unsold.

The homebuilder anticipates revenue to in a range of $36 billion to $37.5 billion for fiscal 2025, while the Street is looking for $39.52 billion. Revenue rose 4% to $36.8 billion in the year ended September. The company expects to close between 90,000 and 92,000 homes in the ongoing fiscal year.

"While mortgage rates have decreased from their highs earlier this year, many potential homebuyers expect rates to be lower in 2025," Auld said. "We believe that rate volatility and uncertainty are causing some buyers to stay on the sidelines in the near term."

The company aims to use incentives such as mortgage rate buydowns to "help spur demand and address affordability," Auld added.

For the ongoing three-month period ending Dec. 31, D.R. Horton ( DHI ) expects overall revenue to come in between $6.8 billion and $7.3 billion, Jessica Hansen, the company's senior vice president of communications, said on an earnings call, according to a Capital IQ transcript. The market's current estimate is for revenue of nearly $7.8 billion. Homes closed are seen at 17,500 to 18,000 for the fiscal first quarter, according to Hansen.

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