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D.R. Horton, Inc. - Nationwide public home builder

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2008-03-05

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stories: bloomberg.com, msn.com, msn.com, bizjournals.com, dallasnews.com, reuters.com, tradingmarkets.com

D.R. Horton, Inc. had net earnings in 2005 at the top of the housing bubble of nearly $1.5 billion (financials). However, for fiscal 2007 (YE 9/30/2007) the company reported a net loss of approximately $700 million. Per a Bloomberg article on D.R. Horton's Q4 2007:

The quarterly results included pre-tax charges to cost of sales of $278.3 million of inventory impairments and $40.3 million of write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue.

This comes after posting a loss of $823.8 million in the prior quarter. The builder has been getting unwanted land off it's books (link link) as it blames charges due to inventory and the value of land options for the swing into a loss in the fiscal fourth quarter (5).

In November 2007, the credit rating agencies started piling on with S&P cutting the builder to junk and Goldman Sachs following up in December by cutting estimates. The company's stock (DHI) traded to near $45 in 2005 and as low as $10 in 2007. As of Nov. 2007 D R Horton employed 6,231 people.

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Comments:

allmatinc_sd at 13:01 2008-10-20 said:
I spoke with a superintendent with DR Horton last week. He told me in D/FW they were not pouring any slabs for spec(not already sold) homes for all of October, and probably November. They are still a very good, reputable company to sell material to. Permalink

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Important: Ailing Builders haven't shut down, but they've suffered significant valuation declines, temporarily halted redemptions, or faced other major business hurdles. Builders on watch may not even have unusual declines relative to peers, but may be posted if it is felt there may be risk of developing a more serious condition in the near future.