D.R. Horton Says Orders Fall, Sees Loss
Homebuilder D.R. Hortonsaid Tuesday declining home values would lead it to post its first quarterly loss since it listed on the New York Stock Exchange in 1995.
Hurt by the deteriorating U.S. housing market, the No. 1 U.S. home builder said net sales orders in its fiscal third quarter, which ended June 30, fell 40% to 8,559 homes from 14,316 homes a year earlier, and the dollar value of the orders dropped 47% to $2.0 billion from $3.8 billion.
"Market conditions for new home sales declined in our June quarter as inventory levels of both new and existing homes remained high, and we expect the housing environment to remain challenging," said Chairman Donald Horton, in a statement.
D.R. Horton added that as a result of the weak market, it will post significant asset impairments which will result in a loss for both the third quarter and the nine-month period.
The company's third-quarter cancellation rate was 38%.
Horton's traditional customer is a first- or second-time home buyer. It builds homes in 27 states with sales prices ranging from $90,000 to more than $900,000.
Executives of some of the largest U.S. home builders, including Horton Chief Executive Donald Tomnitz, have said they don't expect the market to rebound this year and probably not the first half of next year either.