D.R. Horton, No. 1 Homebuilder, Tops On Revenue As Earnings Match Estimates

Homebuilder D.R. Horton ( DHI ) reported in-line fourth-quarter earnings and better-than-expected revenue early Thursday.

[ibd-display-video id=2549896 width=50 float=left autostart=true] Estimates: EPS up 9% to 82 cents per share on an 8% sales gain to $4.04 billion.

Results: D.R. Horton earned 82 cents per share, as sales rose 11% to $4.16 billion.

Outlook: Net sales orders, a leading indicator, rose 18% to 10.333 homes, while the value rose 19% to $3.1 billion. The company said it sees fiscal 2018 revenue of $15.5 billion to $16.3 billion. The analyst consensus is $15.87 billion, according to Zacks Investment Research.

D.R. Horton also raised its quarterly dividend to 12.5 cents a share

Stock: D.R. Horton rose 1.3% to 45.98 on the stock market today , hitting a record 46.66 intraday.

IBD’S TAKE: The Building-Residential/Commercial industry group is ranked No. 2 among 197 industry groups by IBD based on stock price performance trends, and IBD Stock Checkup ranks D.R. Horton No. 1 in the group , based on earnings, sales, margin and stock performance. D.R. Horton cleared a buy point , the point at which investors have the best chance for near-term gains, in late September and has since charged ahead 20%. Here’s a place to look for other stocks that may be poised for gains.

Highflying homebuilder stocks hit some turbulence last week amid news that the House Republican Tax Cut and Jobs Act would limit the mortgage interest deduction to new mortgages up to $500,000. Toll Brothers ( TOL ), which sells more luxury homes, suffered more than most, but even it has largely recovered thanks to strong housing market fundamentals. While D.R. Horton sells homes for up to $1 million, its average selling price is about $300,00.

The Senate is reportedly leaning toward scrapping the House’s lower cap on mortgages eligible for the interest deduction, but it might not preserve the House provision allowing itemizers to deduct up to $10,000 in property taxes. Realtors and homebuilders have lined up against the House plan out of concern what it could mean for home prices.

Still, homebuilders have surged 104% since Donald Trump’s election on Nov. 8, 2016, best out of IBD’s 197 industry groups.

Shares of mortgage insurance provider Essent Group ( ESNT ) have come under pressure recently, falling back toward its 50-day moving average. Essent reported better-than-expected earnings on Thursday. Its shares climbed 1% to 42.21.

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