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The Globe and Mail

U.S. homebuilder D.R. Horton swings to profit

A D.R. Horton sale sign sits on the front lawn of a home in Frisco, Texas, Saturday, Feb. 2, 2008.

Tony Gutierrez/AP

Homebuilder D.R. Horton Inc. posted a profit for its fiscal fourth quarter on Friday, saying more people bought homes.

It is the third consecutive quarter in the black for the homebuilder. Net sales orders rose 7 per cent to 4,241 and homes closed rose 17 per cent to 17,421. In recent weeks, a few other major homebuilders have reported improved sales trends versus the third quarter last year.

Sales of new homes fell dramatically industrywide in the second half of last year after tax credits aimed at spurring home sales expired. That left builders this summer with some relatively easy-to-beat year-ago sales benchmarks, despite sales this year being on pace to be worse than in 2010.

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New home sales have declined nationally this summer amid growing uncertainty over the U.S. economy, high unemployment and concerns that U.S. home prices have yet to hit bottom.

D.R. Horton said its net income for the three months ending Sept. 30 totaled $35.7-million (U.S.), or 11 cents per share. That compares with a loss of $8.9-million, or 3 cents per share, in the same quarter last year.

Revenue rose 16 per cent to $1.07-billion from $925.7-million.

Analysts polled by FactSet were expecting earnings of 14 cents a share on $1.08-billion in revenue.

"Our strategy to open new communities for first-time and move-up buyers, improve gross margins, adjust our overhead and reduce interest expense led to our second consecutive year of profitability, despite continued challenging market conditions," said Chairman Donald R. Horton.

For the year, net income fell 71 per cent to $71.8-million, or 23 cents per share. That compares with $245.1-million or 77 cents per share last year.

Revenue fell 18 per cent to $3.55-billion from $4.31-billion

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D.R. Horton, which is based in Fort Worth, Texas, operates in 26 states and sells homes with prices ranging from $90,000 to more than $700,000. It was ranked the nation's largest builder last year on the basis of home closings by Builder magazine.

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