DR Horton cut his sales forecast and Lennar missed his revenue expectations.

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DR Horton Inc. signage stands in front of homes under construction at the Eastridge Woods development in Cottage Grove, Minnesota

Daniel Acker / Bloomberg

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DR Horton (ticker: DHI) lowered its quarterly sales forecast and Lennar (ticker: LEN) missed sales expectations for the third quarter. Supply constraints are to blame and homebuilders’ inventories are down.


DR Horton

sees its current quarter home sales closings and lower than initial forecast sales. The company said in a press release that it now expects closings to be 21,500, at the midpoint of management’s forecast range, down from the initial midpoint of 23,750. Sales are now forecast at $ 7.8 billion, down from the previous forecast of $ 8.15 billion.

For the full year 2021, the company is now forecasting revenue of $ 27.5 billion, compared to an initial forecast of $ 27.85 billion. According to the company, the low income is due to a shortage of building materials and labor, limiting the company’s ability to meet “strong demand for new housing.”

However, the company’s bottom line should not be as affected as sales. Prices are benefiting from strong demand and weak supply, the company said, helping to increase management’s gross margin forecast for the current quarter to 26.65% from 26.15%. The company is therefore maintaining its earnings per share expectations.

Analysts were expecting EPS of $ 3.44 for the quarter.

The stock fell 3% on Monday, worse than the 1.7% drop in the S&P 500. Not only is management’s warning bad for the stock, but the market as a whole is worried about the macroeconomic implications of the stock. Chinese real estate developers in debt.

During this time,


Lennar

posted earnings for the third quarter and missed sales expectations, but topped BPA estimates. The company earned $ 3.27 per share, excluding mark-to-market gains on certain investments, exceeding adjusted earnings estimates of $ 3.24 per share. Sales were $ 6.9 billion, below expectations of $ 7.1 billion. The company said it faces supply chain constraints, hampering its ability to sell as many homes as it had targeted for the quarter.

Positively, higher prices helped boost profitability, the company said. The company’s gross margin was 27.3%, up 4.2 percentage points year-over-year, and was the company’s highest quarterly margin. In addition, a record net margin of 20.3% was the main driver of earnings per share, management said.

Nonetheless, management said supply chain constraints are expected to persist. He expects shipments for the current quarter to be around 18,000, but expects a gross margin of 28%.

The stock fell 2.2% after the earnings report, after falling 2.9% during normal trading hours.

KB Home (ticker: KBH) will publish its earnings this week. Analysts are looking for sales and EPS of $ 1.6 billion and $ 1.63, respectively. The stock fell 4.1% during normal hours before gaining 0.5% after hours.

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