D.R. Horton Posts
39% Drop in Orders

D.R. Horton Inc. posted a 39% drop in fiscal fourth-quarter net orders as the cancellation rate at the nation's largest home builder continued to surge and challenging conditions are expected to persist.

For the quarter ended Sept. 30, the Fort Worth, Texas, company had orders for 6,374 homes worth $1.31 billion, compared with 10,430 orders worth $2.53 billion a year earlier. The cancellation rate was 48%, up from 38% in the fiscal third quarter. For fiscal 2007, orders slumped 35% to 33,687. Their worth fell 41% to $8.23 billion.

Chairman Donald R. Horton said market conditions "declined" during the quarter amid high inventories for new and existing homes and "very competitive" pricing. He also cited tightening lending standards, brought on in part by the summer's credit crunch. "Buyers continued to approach the home buying decision cautiously," he said. "We expect the housing environment to remain challenging."

For its fiscal third quarter, D.R. Horton recorded nearly $1.3 billion in pretax charges, write-downs and write-offs, the largest amount recorded by a builder thus far in the current downturn. The industry has made billions of dollars of such accounting moves as the sector readjusts to the slower housing market.

On Friday, Centex Corp. said it plans to take nearly $1 billion in fiscal second-quarter charges, mostly related to land write-downs and write-offs. For the period ended Sept. 30, the Dallas home builder said orders were down 13% and sales fell 14%.

D.R. Horton is due to release its fourth-quarter results on Nov. 20.

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