D.R. Horton, Inc. (DHI), the nation's largest homebuilder, reported fiscal 2025 revenue and home deliveries below analyst estimates, leading to a decline in its share price. The company attributed the shortfall to elevated interest rates and housing affordability challenges, as well as supply chain and labor market constraints.
In its earnings release, D.R. Horton projected consolidated revenues of $36.0 billion to $37.5 billion and home deliveries between 90,000 and 92,000 homes for fiscal 2025. Analysts had anticipated revenues of $39.41 billion and home deliveries of 95,000 homes. The company's fourth-quarter net income attributable to D.R. Horton fell to $1.28 billion, or $3.92 per share, from $1.51 billion, or $4.45 per share, in the prior-year quarter. Consolidated revenues for the quarter decreased 5% to $10.0 billion.
The company's strategic focus on affordable housing has been impacted by rising interest rates and housing prices. Higher mortgage rates and increased home prices have made it more challenging for first-time homebuyers to enter the market, leading to a decline in demand for affordable housing options. Additionally, supply chain disruptions and labor market constraints have hindered the company's ability to deliver homes as expected.
D.R. Horton's recent increase in the quarterly cash dividend by 33% to $0.40 per common share may help to boost investor sentiment and support the company's stock price. However, the company's guidance for 2025 indicates that it may face continued headwinds in the form of elevated interest rates and housing affordability challenges.
In conclusion, D.R. Horton's fiscal 2025 revenue and home deliveries fell short of analyst estimates, leading to a decline in the company's share price. The company's strategic focus on affordable housing has been impacted by rising interest rates and housing prices, as well as supply chain and labor market constraints. While the company's recent dividend increase may help to boost investor sentiment, the outlook for 2025 remains uncertain.
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