D.R. Horton Inc. said Tuesday it posted a profit for the first time since 2007 with a gain of $192 million in the first fiscal quarter.
The nation's second-largest homebuilder also said the number of new orders and completed sales increased significantly compared with the first quarter of last year.
D.R. Horton earned 56 cents a share in the three months ended in December, thanks largely to a hefty tax gain. That compares with a loss of $62.6 million, or 20 cents a share, in the prior-year period.
Excluding the one-time tax benefit of $149.2 million, the company earned $42.8 million.
Revenue rose 23 percent to $1.1 billion from $900.3 million. The number of homes sold increased 36 percent to 5,529, while orders increased 45 percent to 4,037 homes.
Analysts were expecting a loss of 13 cents a share on revenue of about $960.2 million.
In premarket trading, D.R. Horton's stock jumped 7 percent to $12.78 up from Monday's close of $11.91.
D.R. Horton, based in Fort Worth, Texas, has operations in 27 states. Builders like D.R. Horton often begin construction on homes before they have a buyer, so their actions are a bellwether for the housing market.
Other homebuilders are scheduled to report quarterly results this week, including Standard Pacific Corp. and Beazer Homes USA Inc.
For D.R. Horton, the bumps in orders and completed sales came in an environment where homes sales have been sluggish in recent months. New home sales dropped almost 8 percent in December, the weakest results since March and only 4 percent above the bottom last January.
Still, some builders have managed to turn a profit in the final months of 2009 because of a new tax rule that allows companies to offset past losses. D.R. Horton said it filed for an additional $352 million tax refund related to 2009 operating losses. The company expects to receive the refund in the current quarter.
D.R. Horton has seen orders improve in recent quarters due to low mortgage interest rates and tax credits for homebuyers. The builder caters to first-time buyers, who now account for more than half of its business.
The company's chairman of the board, Donald R. Horton, said he believed Congress' extension of first-time homebuyer tax credit until April 30 will benefit the company's spring selling season.
But the housing market still faces some challenges, including rising foreclosures, high inventory and unemployment, as well as tightened lending standards for loans insured by the Federal Housing Administration, Horton said.
Also Tuesday, D.R. Horton declared a quarterly cash dividend of 3.75 cents a share, payable on Feb. 25 to stockholders of record on Feb. 16.
On the Net:
D.R. Horton: http://www.drhorton.com/corp/
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