D.R. Horton Delivers Strong Q1 Results, Positions for Continued Success
D.R. Horton, America's Builder, reported strong first quarter 2025 earnings, solidifying its position as the largest builder in the United States. The company delivered a pretax income of $1.1 billion on revenues of $7.6 billion, with a pretax profit margin of 14.6%. This impressive performance was highlighted by President and CEO Paul Romanowski during the company's recent conference call.
"We remain focused on enhancing capital efficiency to produce sustainable returns and cash flow," Romanowski stated. "Our homebuilding pretax return on inventory for the trailing 12 months ended December 31 was 26.7%." This focus has yielded impressive results, with D.R. Horton's return on assets ranking in the top 15% of all S&P 500 companies for the past 3, 5, and 10-year periods.
During the quarter, the company generated consolidated operating cash flow of $647 million and returned a significant $1.2 billion to shareholders through share repurchases and dividends. This commitment to returning value to investors has been a hallmark of D.R. Horton's strategy, with essentially all of the cash generated over the past 12 months being returned to shareholders.
The company's demographics-driven approach to housing demand remained favorable, with a continued focus on affordable product offerings. To address affordability and spur demand, D.R. Horton has utilized incentives such as mortgage rate buydowns and increased sales of smaller floor plans. The local teams have been successful in meeting the market, with net sales orders decreasing only slightly from the prior year.
"With 53% of our first quarter closings also sold in the same quarter, our sales, incentive levels, and gross margin are generally representative of current market conditions," Romanowski noted. This strategic approach has positioned D.R. Horton well for the remainder of fiscal 2025, with a strong pipeline of finished lots available.
Despite the seasonally slow first quarter, D.R. Horton's results demonstrate its ability to navigate market fluctuations and drive long-term success. As the largest builder in the United States, the company continues to set the standard for excellence in homebuilding and customer satisfaction.
The impressive performance was also highlighted by Executive Vice President Mike Murray, who noted that earnings for the first quarter of fiscal 2025 decreased 7% to $2.61 per diluted share compared to $2.82 per share in the prior year quarter. Net income for the quarter was $845 million on consolidated revenues of $7.6 billion.
Executive Vice President Bill Wheat added that the company's net sales orders for the first quarter decreased 1% from the prior year to 17,837 homes and order value decreased 2% to $6.7 billion. However, the cancellation rate for the quarter was 18%, down from 21% sequentially and from 19% in the prior year quarter.
The company's continued commitment to returning value to shareholders and driving long-term success positions it well for a strong remainder of fiscal 2025."
