Outlook improves for builder

Thursday, July 22, 2004 | 11:04 a.m.

SUN STAFF AND WIRE REPORTS

ARLINGTON, Texas -- D.R. Horton Inc., a big Las Vegas home builder and the third-largest U.S. home builder by stock market value, Wednesday boosted its profit forecast for the current fiscal year after quarterly earnings increased 62 percent as low mortgage rates spurred sales.

Net income rose to $251.3 million, or $1.06 a share, for the three months ended June 30, from $155.6 million, or 66 cents, a year earlier, the Arlington-based company said in a statement.

Full year earnings will be as much as $3.85 a share compared with an earlier estimate of $3.55.

Revenue increased 26 percent to $2.8 billion.

"Through June 30th, the company has already earned approximately what we earned in all of fiscal year 2003," Chairman Donald R. Horton said in the statement.

Builders are profiting as low mortgage rates drive sales to a fourth consecutive record year. D.R. Horton and competitors such as industry leader Lennar Corp., which builds in Las Vegas under the name U.S. Home and Greystone, likely will sell 1.17 million homes this year, a gain of 7.4 percent from last year, according to the National Association of Home Builders in Washington.

Home closings rose 23 percent from a year ago to 11,050 houses. Orders rose 15 percent during the quarter to 12,444, with a value of $3.2 billion, from 10,811, or $2.6 billion, a year earlier, the builder reported two weeks ago.

The backlog of homes ordered and not yet delivered rose 16 percent to 19,531 homes valued at $5.2 billion from 16,901 homes valued at $4 billion a year earlier.

In Las Vegas, D.R. Horton ranks as the fourth largest home builder, based on 2003 sales data. The company closed escrow on 1,794 homes in 2003, Home Builders Research Inc. reported.

Last week, the average U.S. rate for a 30-year fixed mortgage was 6 percent, a 12-week low, according to Freddie Mac. The rate probably will average 6.1 percent in 2004, the lowest since 1966, the second-largest U.S. mortgage buyer said. Last year, the rate was 5.8 percent, the lowest since 1965.