D R Horton FY 4Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

CEO retired

“I’d like to take a minute to recognize Don Tomnitz on his recent retirement and thank him for his leadership, advice and support over the years. On behalf of the entire D.R. Horton team I’d like to congratulate him on an outstanding carrier of 31 years with the company, 15 years as our CEO.’

New CEO is not a spotlight kind of guy (the conference call shows it too, a very team oriented approach)

“I guess the initial focus is really getting our handle on this public position role Stephen I have always been behind the curtain kind of guy and being pushed out front is different for me.”

Focus is just to keep us doing what we’re doing

“Three to five years down the road I think my goal is just to continue the excellence companies had, focus is on consistency really on a day-by-day, subdivision by subdivision execution. I feel like our position in the industry today is so unique, the fact that we have been the largest for as long as we’ve been the largest, the geographic footprint that we have it really is, if we just execute and do what we can do on a day-to-day basis we should have a great three to five year run.”

Texas is still strong, lower oil prices could help us in other parts of the country

“Texas remains strong for us. I think if oil prices stay down it could soften somewhat but any softening we see in Texas, I think low oil prices should create additional demand in the other markets. So we’re Texas based but we’re significant in really every market in the country that we want to be in. So it’s pretty good balanced for us. Could actually be beneficial.”

land costs pretty flat, other costs up 5%

“Our land cost has remained relatively flat as a component of the overall cost going into our house. We called out some of the other things that did impact our margin this quarter but land remained relatively flat…And in terms of the other input cost on a year-over-year basis we have seen some cost pressures, our stick and brick cost on a per square foot basis were up about 5%. On a year-over-year basis, sequentially they are up about 2%.”

We’re happy with how things have gone so far in October

“our October sale phase was strong and we feel good with what we’ve seen thus far even though we’re only 11 days into November and greater than 20% in October. As David said earlier we’re on plan to deliver what is in our business plan and you’ll have to wait till January to see what we deliver for the quarter.”

Still a very good sales month for us

“I wouldn’t read anything special into whether we accelerated or decelerated in October. I think in general we would still say it’s a very good sales environment, still a very good sales month for us.”

Our assumption is that there aren’t big changes from new FHA guidelines

“In terms of the FHA, FHA clearly there is a lot of talk going on in terms of our assumption as we look at our business. We are not assuming any change in the mortgage environment, just the same current mortgage lending standards. “