D.R. Horton Posts Earnings of $2.67 per Share, Forecasts 2027 Revenue of $30 Billion to $32 Billion
Key Facts
D.R. Horton reported diluted earnings of $2.67 per share in the fourth quarter of fiscal 2026, below analysts’ consensus of $3.01, while the stock fell 4.2% after the results were announced on October 29. Revenue was $9.4 billion, above the market estimate of $9.07 billion, but net income attributable to the company fell 18% to $741.8 million. Operating indicators pointed to weaker demand, with net sales orders and home sales revenue declining while the cancellation rate rose from a year earlier. The company forecast lower revenue and closings for fiscal 2027 while also announcing an increase in its quarterly cash dividend. The combination reflects a gap between quarterly revenue beating estimates and pressures facing sales and demand.
Home sales revenue was $8.4 billion, down 2%, with 22,915 homes closed during the quarter. Net sales orders fell 7% to 18,619 homes, and their value declined 9% to $6.6 billion. The cancellation rate also rose to 23%, compared with 20% in the year-earlier period. In the third fiscal quarter, the company recorded 23,084 net sales orders worth $8.4 billion, while the cancellation rate remained at 20%, compared with 17% a year earlier. The quarter-to-quarter comparison shows fewer orders between the two quarters, while the cancellation rate in the fourth quarter rose from both the previous quarter and the year-earlier period.
Executive Chairman David Auld said higher mortgage rates, housing affordability constraints and consumer caution weighed on demand. He added that the company expects incentives to remain elevated in fiscal 2027, noting that their level will depend on market conditions throughout the year. Incentives are significant in the company’s outlook for next year, as they coincide with expected declines in home revenue and closings from fiscal 2026 levels. The company’s revenue fell to $9.2 billion in the third fiscal quarter, while net income declined 12% to $904.9 million. Net sales orders in that quarter totaled 23,084 homes worth $8.4 billion, with a cancellation rate of 20%, compared with 17% in the same quarter a year earlier.
D.R. Horton expects consolidated revenue of between $30 billion and $32 billion in fiscal 2027. It also expects to close between 79,000 and 84,000 homes, compared with 84,202 homes closed in fiscal 2026. In fiscal 2026, annual net income was $2.9 billion, diluted earnings per share were $10.11, and operating cash flow was $3.5 billion. The company plans operating cash flow of about $3.5 billion in fiscal 2027, share repurchases of about $3 billion, and dividends of about $500 million. These figures distinguish the operating outlook from the company’s plans to return capital to shareholders over the coming year.
The company’s board raised the quarterly cash dividend 11% to $0.50 per share, according to an announcement issued on October 29. The increase came alongside expectations that incentives will remain elevated in fiscal 2027, while the company expects to close fewer homes than in the previous fiscal year. D.R. Horton shares closed at $143 on October 28, according to EL7 data. The company had announced that results for the fourth quarter and fiscal year ended September 30, 2026, would be released before the market opened on October 29, with a conference call that morning at 8:30 Eastern time. The call gives management an opportunity to present investors with the results and annual outlook announced by the company.