(Reuters) - D.R. Horton Inc DHI.N, the No.1 U.S. homebuilder, drastically cut its 2017 forecast for cash flow from operations due to delays caused by the recent hurricanes, becoming the second homebuilder to say natural disasters have hurt operations.
The company’s shares were down 3.7 percent at $35.52 in light premarket trading on Monday.
D.R. Horton, which mainly sells single-family homes, said it expected about $150 million of cash flow from operations, down from its previous forecast of about $300 million.
The company said it did not expect the recent hurricanes to hurt its preliminary 2018 forecast.
Earlier this month, the No.2 U.S. homebuilder Lennar Corp LEN.N said it expected hundreds of home deliveries in Florida, Georgia and South Carolina to be delayed because of Hurricane Irma that ravaged the Atlantic coast.
D.R. Horton also said it expected backlog conversion to be about 85 percent for the current quarter ending Sept. 30. The company had forecast a range of 88 percent to 90 percent.
Fort Worth, Texas-based D.R. Horton said it expected selling, general and administrative expenses as a percentage of homebuilding revenues to be about 8.6 percent, compared to a previous forecast of 8.3 percent to 8.4 percent.
While demand for housing remains robust, there is an acute shortage of homes for sale partly due to a lack of labor, which has weighed on the housing market for about two years.
Harvey and Irma could worsen the housing shortage as scarce labor is being used for the rebuilding efforts and materials are bid higher.
Irma, one of the most powerful Atlantic storms on record, killed more than 80 people in the Caribbean and the United States and followed Harvey, which killed more than 80 people when it struck Texas in late August and caused massive flooding in Houston.
D.R. Horton said at a RBC Capital Markets conference this month that Texas accounts for about 25 percent of the total number of homes that it sells, while Florida is about 20 percent.
Reporting by Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr
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