D.R. Horton, Inc. (NYSE:DHI) shares rose Tuesday after the homebuilder reported fiscal second-quarter 2026 results, with earnings topping Wall Street expectations despite softer revenue.

D.R. Horton is an American home construction company based in Arlington, Texas. Since 2002, the company has been the largest homebuilder by volume in the United States.

Details

Net income attributable to the company was $647.9 million, or $2.24 per diluted share, down from $810.4 million, or $2.58 per share, a year earlier. Earnings per share exceeded the analyst estimate of $2.17.

Revenue declined to $7.558 billion from $7.734 billion in the prior-year quarter and missed the $7.601 billion consensus estimate. Consolidated pre-tax income was $867.4 million, with a pre-tax profit margin of 11.5%. Margins benefited by 40 basis points from lower warranty costs and a favorable litigation outcome.

Homebuilding Performance Weighs On Results

Homebuilding revenue fell 2% year over year to $7.1 billion. Homes closed increased 1% to 19,486. However, pre-tax income in the segment dropped 19% to $757.9 million, and the pre-tax margin was 10.7%.

Net sales orders rose 11% to 24,992 homes, with an order value of $9.2 billion. The cancellation rate was 16%, unchanged from a year earlier. The backlog totaled 16,882 homes valued at $6.422 billion at quarter-end.

Rental, Lot Development, And Financial Services Contributions

Rental operations generated $211.8 million in revenue from the sale of 566 single-family rental homes and 216 multifamily units, with a pre-tax margin of 5.8%. Forestar contributed $374.3 million in revenue from 2,938 lot sales, with an 11.7% pre-tax margin. Financial services revenue was $192.8 million, producing pre-tax income of $51.7 million and a margin of 26.8%.

Operating cash flow totaled $441.5 million for the six months ended March 31, 2026. Total liquidity stood at $6.0 billion, including $1.92 billion in cash and cash equivalents.

At quarter-end, the company had 38,200 homes in inventory, including 22,900 unsold homes. Of those, 5,500 were completed, with 800 completed for more than six months.

Management Commentary

Executive Chairman David Auld said affordability constraints and cautious consumer sentiment continue to weigh on demand, though net sales orders rose 11% year over year and unsold completed homes declined 35%. He added that sales incentives are expected to remain elevated in fiscal 2026, depending on demand, mortgage rates, and broader market conditions.

Outlook

The company reiterated fiscal 2026 revenue guidance of $33.5 billion to $35.0 billion, compared with a $33.86 billion consensus estimate, and now expects homebuilding closings of 86,000 to 87,500 homes, versus a prior range of 86,000 to 88,000. It also expects operating cash flow of at least $3.0 billion, share repurchases of about $2.5 billion, and dividend payments of roughly $500 million.

DHI Price Action: D.R. Horton shares were up 7.26% at $164.46 at the time of publication on Tuesday, according to Benzinga Pro data.

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