By Shreyasee Raj
(Reuters) -Largest U.S. homebuilder D.R. Horton Inc said on Thursday it expected current-quarter orders to be even lower than the third quarter as it limits new bookings amid a slowdown in homebuilding due to high material and labor costs.
Shares of the company were down nearly 3% in afternoon trading as third-quarter orders, an indicator of future revenue, fell 17% and missed estimates.
“Based on the stage of completion of our current homes and inventory, production schedules and capacity, we expect to continue restricting the pace of our sales orders,” Chief Financial Officer Bill Wheat said on a call with analysts.
The COVID-19 pandemic, which boosted the U.S. housing market with people seeking spacious accommodations while working from home, also disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials.
That led to a jump in material costs and permits for future home construction in the United States to decline to an eight-month low in June.
Horton’s quarterly orders were 17,952 units in the third quarter, while analysts were expecting 22,694 units.
“We expect the stock to come under pressure given the magnitude of the order miss as no investors we have spoken with expected declines this severe,” Michael Dahl, analyst at RBC Capital Markets, wrote in a note.
Horton expects full-year revenue between $27.6 billion and $28.1 billion, marginally above estimates.
Its third-quarter profit jumped 77% to $1.12 billion as it benefited from record-high property prices. Adjusted earnings of $3.11 per share and revenue of $7.28 billion topped estimates.
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