D.R. Horton Inc (NYSE:DHI.N), the top U.S. homebuilder, posted a first-quarter profit that beat market expectations, helped by a surge in orders indicating a stabilizing housing market, and said it was looking at spring selling season with "cautious optimism."
The meltdown in the U.S. housing market triggered the 2007-09 recession, but home building has seen growth in the last few quarters and building permits jumped to a 1- year high in November.
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Horton, which focuses on lower-end homes for first-time homebuyers, had been hurt as a massive overhang of used and foreclosed homes have resulted in lower pricing power for builders of new houses.
Evidence is mounting that a recovery is building, though the improvement has been erratic.
Earlier in the day, Canadian wood panels maker Norbord Inc <NBD.TO> said the U.S. housing sector is at an inflection point and is now in the early phase of a more gradual rebound.
Horton, which competes with Lennar Corp <LEN.N> and PulteGroup <PHM.N>, said net sales orders rose 17 percent to $705.6 million. Orders are a leading indicator for builders, which do not recognize revenue until they close on a home.
Lennar, which also posted a sharp jump in quarterly orders, said high rental rates were driving customers to buy new homes, and low home prices and low interest rates were helping.
Horton's October-December net income was $27.7 million, or 9 cents a share, compared with a net loss of $20.4 million, or 6 cents a share, a year ago. Revenue rose 15 percent to $885.6 million.
Analysts, on average, were expecting earnings of 4 cents a share, on revenue of $896.9 million, according to Thomson Reuters I/B/E/S.
Shares of the company closed at $14.12 on Thursday on the New York Stock Exchange.