These projects stand to further spice up D.R. Horton, Inc. (NYSE:DHI)’s results, which showed a 12% increase in new home orders for the June-ended quarter but came short of analysts’ expectation calling for a gain of 30% or more. The builder’s quarterly revenue rose 47% year over year to $1.6 billion, while its average sales price increased 15% to $525,000. D.R. Horton, Inc. (NYSE:DHI) hopes orders will pick up once prospective buyers’ expectations have adjusted to the new mortgage rates.
PulteGroup, Inc. (NYSE:PHM), based in Bloomfield Hills, Mich., is another national home builder increasing its presence in Florida. Its DiVosta Homes unit is set to build a new active adult community in the master-planned Palmer Ranch development in Sarasota, Fla. It initially purchased 111 lots, representing the first phase of a potential 350-lot acquisition on 125 acres in the development. The new DiVosta community is expected to open in early 2014.
For its 2013 second quarter, the PulteGroup, Inc. (NYSE:PHM) posted a 19% year-over-year increase in revenue to to $1.2 billion on a 9% gain in average selling prices to $294,000. The market, however, appeared unimpressed as the company’s share price has been essentially on the retreat since July 25, when earnings were announced.
Post-IPO strength on display
WCI seems to be faring better, having risen about 12% from its $15 IPO price. Investor confidence on this stock appears to have been bolstered by the company’s recent results, which saw a reversal of a $16.5 million loss in the 2012 second quarter to $8.2 million in net income in the 2013 second quarter.
The company also reported a 170% year-over-year gain in revenue to $53.8 million, with homes delivered up 144% to 122 units and average selling prices up 10.8% to $441,000. Contract values, volumes of new orders, and backlogs look similarly robust. Further growth can be expected from eight future neighborhoods, with about 1,900 home-sites for which land parcels valued at $66 million have been purchased.
Final take
Summing it up, the strong focus of WCI in the hot-spot home markets of Florida merits the attention of investors with an eye for opportunities in the real estate sector. In the same vein, further moves by D.R. Horton, Inc. (NYSE:DHI) and the PulteGroup, Inc. (NYSE:PHM) in other markets as promising as those in the Sunshine State bear watching. The current weakness of these two stocks could present entry points for future gains.
The article Why Not a Florida Cure for Your Housing Blues? originally appeared on Fool.com and is written by Arturo Cuevas.
Arturo Cuevas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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