Orders drop by 39% at D.R. Horton, stock declining

Posted Oct 16th 2007 9:20AM by Lita Epstein
Filed under: Earnings Reports, Bad News, D.R.Horton (DHI), Housing

Cancellations of new homes continue to surge and D.R. Horton (NYSE: DHI), the nation's largest home builder, reported a 39% drop in fiscal fourth-quarter net orders, according to a report in the Wall Street Journal today [subscription required]. At the end of the quarter on September 30, D.R. Horton said it had orders for 6,374 homes worth $1.31 billion. Last year for the same quarter, orders totaled 10,430 worth $2.53 billion. The cancellation rate was also up over the rate in the third quarter. Third quarter cancellation rate was 38% and it was 48% in the fourth quarter.

Chairman Donald R. Horton told the Journal that market conditions "declined" and inventories are high. He said, "Buyers continued to approach the home buying decision cautiously. We expect the housing environment to remain challenging."

Pre-market trading in the stock shows a 2.43% drop over yesterday's closing price of $13.58 to $13.25. Expect the drop to continue as the news hits the markets today. Clearly there is no light at the end of the tunnel yet for home builders.

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Tags: d.r. horton, D.r.Horton, dhi, housing, inthenews