DR Horton (DHI) reported stronger sales, as demand for new homes continued to grow during the quarter, and a sharply higher profit, led by a one-time tax benefit.
The Fort Worth, Texas-based homebuilder reported net income of $787.8 million, or $2.22 a share, compared with a year-earlier $28.7 million, or 9 cents.
The latest quarter included a non-cash tax benefit of $716.7 million.
Revenue for the three months ended June 30 climbed to $1.12 billion from $975 million a year ago, narrowly missing the Street’s view of $1.19 billion.
DR Horton closed 9% more homes and the cancellation rate fell to 23% from 27%.
“All of our homebuilding regions were profitable in the third quarter, and each region reported increases in sales, backlog, revenue and pre-tax income compared to last year,” DR Horton Chairman Donald Horton said in a statement.
With 7,311 homes in backlog as of June 30 and a year-over-year improvement in sales as of the first half of July, DR Horton said it expects to increase profitability in the fourth quarter. Analysts are looking for earnings per share, excluding one-time items, of 25 cents.
While DR Horton’s shares were down nearly 4% to $18.08 Friday morning, they have grown more than 43% since January. UBS (UBS) lifted its price target on the homebuilder to $19 from $16.50 on a “neutral” rating.