D. R. Horton’s (NYSE:DHI) revenue and earnings for its first quarter of fiscal 2023 topped Wall Street estimates as its cancellation rate improved from Q4 FY2022 as mortgage rates stabilized. Compared with the year-ago quarter, Q1 revenue rose while earnings per share dropped.

EPS for the quarter ended Dec. 31, 2022 was $2.76, vs. $2.28 consensus, down from $4.67 in the previous quarter and from $3.17 in the year-ago period.

Q1 cancellation rate of 27% vs. 32% in fiscal Q4 and 15% in the year-ago quarter. Net sales orders fell to 13,382 homes, with a value of $4.9B; from 13,582 homes, with a value of $5.4B, in Q4; and 21,522 homes with a value of $8.3B in Q1 2022.

“Beginning in June 2022 and continuing through today, we have seen a moderation in housing demand caused by significant increases in mortgage interest rates and general economic uncertainty,” said Chairman Donald R. Horton. “While these pressures may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable.”

Q1 revenue of $7.26B, beating the $6.43B consensus, fell from $9.64B in Q4 and rose from $7.05B in Q1 2022.

Q1 homebuilding revenue of $6.74B fell from $9.4B in the previous quarter and rose from $6.68B a year earlier.

D.R. Horton (DHI) stock gained 0.8% in Tuesday premarket trading.

Homes closed in the quarter fell to 17,340 homes from 23,212 homes in Q4 and from 18,396 homes in Q1 2022.

At Dec. 31, 2022, D.R. Horton (DHI) had 43,200 homes in inventory, of which 27,800 were unsold.

The company repurchased 1.4M shares of common stock for $118.1M during Q1 FY 2023 and its remaining repurchase authorization at Dec. 31, 2022 was $320.2M.

Conference call at 8:30 AM.

Earlier, D.R. Horton GAAP EPS of $2.76 beats by $0.48, revenue of $7.3B beats by $870M.