* Second-quarter earnings $0.32/share vs est $0.19
* Revenue $1.39 bln vs est $1.26 bln
* Orders jump 34 pct to 7,879 homes
* Average selling price rises 14 pct
* Shares up as much as 8 percent
(Adds details, CEO comment, analyst quote; updates shares)
By Sagarika Jaisinghani and Kanika Sikka
April 26 D.R. Horton Inc almost tripled
its quarterly profit by selling more homes at higher prices and
forecast an even better second half of the year as a recovering
economy encourages more Americans to buy houses.
Shares of the largest U.S. homebuilder rose as much as 8
percent after its second-quarter earnings raced past Wall Street
estimates and the company said the spring selling season was off
to a good start.
"The first half of fiscal year 2013 was nothing short of
phenomenal," Chief Executive Donald Tomnitz said on a
post-earnings conference call. "We expect the second half to be
The U.S. economy expanded at an annual rate of 2.5 percent
in the first three months of 2013 after growth nearly stalled at
0.4 percent in the previous quarter, the Commerce Department
said on Friday.
Home construction added to U.S. economic growth last year
for the first time since 2005, and ground-breaking to build new
homes in the United States rose 7 percent in March to the
highest level since June 2008.
"D.R. Horton's strong results should abate a lot of fears
about slowing housing trends that a lot of people were expecting
coming out of the first quarter," Williams Financial Group
analyst David Williams said.
Record-low interest rates and rising rents are prompting
more Americans to buy homes, leading to a shortage of new houses
and allowing builders to command higher prices. U.S. home prices
in January posted their biggest year-on-year gain in
With an inventory of nearly 16,000 new homes ready for sale,
D.R. Horton is better positioned than many of its competitors to
meet this rising demand, analysts said.
The recovery is being felt further up the supply chain.
Weyerhaeuser Co, a century-old company that makes wood
products used in construction, more than tripled first-quarter
profit due mainly to housing demand.
D.R. Horton, which sells homes priced between $100,000 and
$600,000, said its average selling price rose 14 percent in the
second quarter ended March.
The company's orders rose 34 percent to 7,879 homes, with a
total value of $2 billion in the quarter, up from $1.3 billion a
year earlier. Orders are a key indicator for builders, who do
not recognize their value until they close on a home.
Net income rose to $111.0 million, or 32 cents per share, in
the second quarter from $40.6 million, or 13 cents per share, a
year earlier. Revenue rose 49 percent to $1.39 billion.
Analysts on average expected a profit of 19 cents per share
and revenue of $1.26 billion, according to Thomson Reuters
D.R. Horton has steered clear of entering the apartment
rental business, a market that has attracted peers such as
Lennar Corp and Toll Brothers Inc on demand from
potential first-time buyers who are unable to secure mortgages
in a tight credit market.
"D.R. Horton's management team is very focused and they tend
to do what they know," Williams said. "Today, they're
concentrating on their core business."
D.R. Horton's shares have risen 52 percent in the last 12
months, slightly lagging the Dow Jones U.S. Home Construction
index. The stock was up 7 percent at $26.15 on Friday
afternoon on the New York Stock Exchange.
Shares of Lennar were up 1 percent, while those of Toll
Brothers and No. 2 U.S. homebuilder PulteGroup -- which
reported a better-than-expected quarterly profit on Thursday
-- were up 2 percent.
Shares of Weyerhaeuser rose to a year-high of $32.
(Additional reporting by Garima Goel in Bangalore; Editing by