ConDig (26-Jul-17).  US homebuilder D.R. Horton, which last month entered a merger agreement with residential developer Forestar Group Inc, booked a 16% rise in profit in its fiscal third quarter, while growth in orders for homes was its slowest in the past three quarters.

Net income at the Fort Worth, Texas-based company rose to $289 million for the three months ended June 30 compared with $249.8 million in the same period last year.

Revenue was 17% higher at $3.7 billion from $3.1 billion a year earlier.

Net sales orders, often viewed as an indicator of future revenue for homebuilders, increased 11% in the third quarter to 13,040 homes compared with 11,714 a year ago. But this also compared with a jump in orders of 13.8% in the second quarter and 14.6% in the first quarter.

D.R. Horton’s sales order backlog of homes under contract as of June 30 rose 3% to 15,161 homes and 6% in value to $4.6 billion compared with 14,670 homes and $4.4 billion in the year-ago period. The company’s homes in inventory increased 9% to 27,600 homes compared with 25,300 homes last year.

D.R. Horton said its proposed $560 million deal to snap up a 75% share in Forestar is expected to close in the first quarter of its 2018 fiscal year.

“The proposed merger accelerates D.R. Horton’s strategy of expanding its relationships with land developers and ultimately increasing the optioned portion of its land and lot position to enhance operational efficiency and returns,” it said.

The US homebuilding market continues to be underpinned by a robust job market and steady economy. But the industry is still being hampered by lot and labor shortages that has led to a supply squeeze.