D.R. Horton Inc

XMUN:HO2

Results: D.R. Horton posted third-quarter earnings of $3.20 per share on $9.2 billion of revenue, with pretax margin of 13.3% and home sales gross margin of 20.7%.

Demand: Orders were flat year over year, but management said sales softened later in the quarter and consumer confidence remains cautious.

Guidance: The company trimmed full-year delivery expectations and now expects fourth-quarter starts to come in below third-quarter levels.

Margins: Gross margin came in above the top of guidance thanks to lower stick-and-brick costs and slightly lower incentives, but incentives are still expected to stay elevated.

Cost Outlook: Management expects lot costs to keep rising at about the same pace in Q4, while some construction cost savings may continue near term.

Capital Returns: D.R. Horton returned cash through $616 million of buybacks and a $0.45 dividend, and still targets about $2.5 billion of repurchases and about $500 million of dividends for the year.