D.R. Horton Revenue Reaches $9.4 Billion as Earnings per Share Miss Estimates
Key Facts
D.R. Horton reported fourth-quarter and fiscal 2026 results on October 29 before the market opened, posting consolidated revenue of $9.4 billion for the quarter, above analysts’ estimate of $9.07 billion. But adjusted earnings per share of $2.67 came in below the consensus estimate of $3.01, according to data published by Investing.com. The figures show a divergence between revenue exceeding estimates and adjusted earnings falling short. For the fiscal year ended September 30, net income declined 19% to $2.9 billion, and diluted earnings per share were $10.11. The company had scheduled the release of its annual results and earnings call for 8:30 a.m. Eastern time on October 29.
On the sales front, home sales revenue fell 2% to $8.4 billion in the fourth quarter, with 22,915 homes closed, according to the results. Net sales orders declined 7% to 18,619 homes, and their value fell 9% to $6.6 billion. Meanwhile, the cancellation rate rose to 23% from 20% in the year-earlier period. The decline in orders and increase in cancellations put the revenue figures in the context of weaker future bookings. The divergence between revenue and orders reflects that home closings during the quarter did not prevent new orders and their value from declining.
Executive Chairman David Auld said higher mortgage rates, affordability constraints and consumer caution weighed on demand in the fourth quarter. He added that the company expects sales incentives to remain elevated in fiscal 2027, with their level determined by market conditions during the year. The guidance follows the company’s statement in July that affordability constraints and consumer caution continued to affect demand for new homes. At the time, it expected elevated incentives to continue in the fourth quarter, tying their levels to demand, mortgage rates and market conditions. Its comments for the following quarter affirm that its incentive policy remains linked to financing and demand conditions, without setting a fixed level.
Results for the nine months ended June 30 provide an earlier comparison for the activity trend ahead of the fourth quarter. Homebuilding revenue fell 3% to $22.3 billion, while home closings, at 61,287, were nearly unchanged from the same period in 2025. During those months, net sales orders rose 5% to 66,376 homes, and their value increased 4% to $24.3 billion. But the cancellation rate was 18%, compared with 17% a year earlier, according to the company’s results published in July. The direction of orders shifted from growth over the nine months to a decline in the fourth quarter, while the cancellation rate rose compared with the corresponding period in both readings.
The market pressures cited by Auld coincided with the 30-year fixed mortgage rate rising to 7.32% in Freddie Mac’s October 22 survey, from 7.03% on September 24. U.S. Census Bureau data showed new single-family home sales at 676,000 in September at a seasonally adjusted annual rate, versus a revised August reading of 680,000. The page showed a monthly decline of 0.6% in September compared with revised August. These readings put financing pressure and weaker monthly sales in the backdrop of the company’s results, alongside consumer caution and affordability constraints cited by Auld. With the company guiding for incentives to remain elevated in fiscal 2027, it said their level would depend on market conditions during the year.