The Home Depot Inc. (NYSE: HD) reported third-quarter business results on Tuesday and its management cited improved housing demand for their solid sales and earnings growth, particularly in the U.S. market.
Similarly, homebuilders Beazer Homes USA Inc. (NYSE: BZH) and D. R. Horton Inc. (NYSE: DHI) reported fourth-quarter earnings Monday, which, according to each company's management, reflected a continued U.S. housing market recovery.
Despite improved earnings for fiscal 2012 and a positive outlook for fiscal 2013, shares of Beazer and D.R. Horton were off sharply in afternoon trading on Monday, with BZH down about 17% and DHI 6%. They recovered slightly by Tuesday afternoon.
Home Depot, on the other hand, has rallied sharply on Tuesday, hitting a new 12-year high and closing in on its all-time high of $70, set back in April 2000.
What accounts for the remarkable divergence between the homebuilders and Home Depot?
The answer comes down to comments made by Donald J. Tomnitz, Vice-Chairman, Chief Executive Officer, President and Member of the Executive Committee for D.R. Horton.