Orders grew sharply in every region, but the homebuilder's higher profit missed estimates. Fred Katayama reports.
TV AND WEB RESTRICTIONS~****~ D.R. Horton sold more homes at higher prices in the fourth quarter. With a growing backlog, the U.S. largest home builder boosted revenue 33 percent. Profit grew, too, but it missed estimates. Although the company's margins fell, analysts were encouraged by its fast growth in orders in every region. And that momentum continued into October. Deliveries were particularly strong in the West and Southeast. Investors closely watch Horton's results because its low priced homes cater to interest rate sensitive first-time home buyers. That's a sharp contrast with the previous quarter in which shrinking deliveries of discounted homes in Chicago hurt profit and sank the stock. And it marks the first earnings report under its new CEO David Auld. Donald Tomnitz stepped down from the corner office in September after a 16-year reign.. Sterne Agee analyst Jay McCanless said, "Since it appears D.R. Horton's strategy shift to higher unit volumes worked in the fiscal fourth quarter, we would buy the shares on any weakness related to the headline EPS miss." Horton's shares fell in early trading. With a nearly 5 percent gain this year, it has outperformed peers such as Toll Brorthers, Pulte and KB Home.