DR Horton 4Q14 Earnings Call Notes

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

Big increase in volume

“In the first quarter, our homes sold and closed increased by 35% and 29% respectively, and we had another solid quarter of profitability with $220.7 million of pretax income on $2.3 billion of revenue.”

Texas operations holding up fine

“We saw our Texas operations perform in line with the company and our expectations for the first quarter and into the first few weeks of January so far. So, while we would expect that there could be some general slowdown in Texas at some point, specifically perhaps Houston and Midland, we haven’t exactly seen it yet, and we’re very encouraged seeing the results inline with the expectations right now.”

Spring selling season not here yet, but it’s approaching

“Spring is not even really here yet. But we’re in line with our expectations and we would expect that we’re going to get every margin of dollar that every dollar of margin we can as we move to the spring and as our pace and absorptions stay on track.”

We do expect our land costs to increase

“No, doubt, our land costs are a components that we do expect to increase. We have seen our land as a percentage of our overall revenues or on a per square foot basis, similar to how it look at stick and brick.”

When we underwrite a purchase, we assume everything stays the same

“As we look forward will underwrite a land purchase, we assume flat pricing on the homes as well as flat pricing on the cost develop if it’s a land parcel to be developed as well and stick and brick. It just too hard to start predicting, this is going to go up by this percent, these costs to go up by that percent. It’s much for us controllable underwriting process to look at pricing on a flat basis and then understand what that performance we expected to be to make the investment decision.”

Weather has been a little better this year

“I think weather patterns have been better this year and last year, I mean, we didn’t gave a weather report last year, but I do think that weather impacted people’s ability to get out and buy else. I think the FHA conversation has got people thinking about buying a house and going into models.”