D.R. Horton, Inc. ( DHI ) shares are trading lower after the company reported fourth-quarter results.

Sales fell 5% year-over-year to $10.0 billion, missing the consensus of $10.2 billion.

Net sales orders increased 1% to 19,035 homes and decreased 2% in value at $7.1 billion.

Homebuilding revenue increased 2% to $9.0 billion. Homes closed in the quarter rose 3% to 23,647 homes.

Sales order backlog of homes under contract as of September 30, 2024, decreased 20% to 12,180 homes and 19% in value to $4.8 billion.

D.R. Horton ( DHI ) had 37,400 homes in inventory, of which 25,700 were unsold as of September 30, 2024.

EPS was $3.92, missing the consensus of $4.17.

Return on equity (ROE) was 19.9% for FY24, and homebuilding pre-tax return on inventory (ROI) was 27.8%.

The company’s operating cash flow totaled $2.2 billion in FY24. As of September 30, 2024, the cash balance was $4.5 billion, and the available capacity on its credit facilities was $3.1 billion, for a total liquidity of $7.6 billion.

D.R. Horton ( DHI ) repurchased 3.4 million shares for $561.2 million during the quarter. The company’s remaining stock repurchase authorization as of September 30, 2024, was $3.6 billion.

Subsequent to year-end, the company raised the quarterly dividend by 33% to $0.40 per share. The dividend is payable on November 19, 2024, to shareholders of record as of November 12, 2024.

FY25 Outlook: D.R. Horton ( DHI ) expects revenue of $36.0 billion – $37.5 billion versus the consensus of $39.4 billion.

It expects homes closed to be 90,000 homes-92,000 homes for the year. DHI projects FY25 operating cash flow to be greater than fiscal 2024

The company expects dividend payments of around $500 million and share repurchases of ~$2.4 billion.

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

“To help spur demand and address affordability, we are continuing to use incentives such as mortgage rate buydowns, and we have continued to start and sell more of our homes with smaller floor plans.”

“The supply of both new and existing homes at affordable price points is still generally limited, and demographics supporting housing demand are favorable. With a focus on affordable product offerings, 37,400 homes in inventory and continued improvement in our construction cycle times, we are well positioned for fiscal 2025.”

Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ( ITB ) and Invesco Building & Construction ETF ( PKB ) .

Price Action: DHI shares are down 10.2% at $162.00 premarket at the last check Tuesday.

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