(Reuters) -D.R. Horton reported third-quarter profit and revenue above estimates on Tuesday as buyer incentives sustained home sales amid high interest rates and rising costs, sending shares of the homebuilder up 5.7% before the bell.
The sector is grappling with weakening consumer sentiment, prompting builders to offer incentives such as mortgage rate buydowns and smaller, more affordable homes to stimulate demand.
CEO Paul J. Romanowski noted continued impact on new home demand amid ongoing affordability constraints and cautious consumer sentiment.
“We expect our sales incentives to remain elevated and increase further during the fourth quarter, the extent to which will depend on the strength of demand during the remainder of summer, changes in mortgage interest rates and other market conditions,” Romanowski said.
On an adjusted basis, D.R. Horton earned $3.36 per share in the quarter ended June 30, compared with analysts’ average estimate of $2.88 a share, according to data compiled by LSEG.
The Arlington, Texas-based company’s third-quarter revenue fell 7.4% from a year ago to $9.23 billion, compared with analysts’ estimate of $8.76 billion.
It narrowed its annual consolidated revenue forecast range to between $33.7 billion and $34.2 billion from its earlier forecast of $33.3 billion to $34.8 billion.
Transaction closings from homebuilding operations for the year are expected to be between 85,000 and 85,500 homes, compared with its earlier forecast of 85,000 to 87,000 homes.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Pooja Desai)
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