Pulte Has First Profit Since 2006 on Higher Revenue
PulteGroup Inc., the largest U.S. homebuilder by revenue, unexpectedly reported its first quarterly profit since 2006 after a tax benefit and sales boost from its purchase of Centex Corp.
Net income was $76.3 million, or 20 cents a share, in the second quarter, the Bloomfield Hills, Michigan-based company said today in a statement. The net loss was $189.5 million, or 74 cents, a year earlier. The average estimate of eight analysts in a Bloomberg survey was for a loss of 1.5 cents a share.
Housing purchases climbed earlier this year because of a federal tax credit of as much as $8,000 for first-time buyers. Acquiring rival Centex for $3.3 billion in August 2009 also boosted results, Chief Executive Officer Richard Dugas said during a conference call today.
“By putting the two organizations together, it allowed us to meaningfully increase the number of homes we delivered and the corresponding revenue we recognized,” he said.
Homebuilding revenue was $1.27 billion and the company sold 5,030 homes at an average price of $251,000. A year earlier, before the addition of Centex, the company had revenue of $657.9 million and 2,500 home sales. The combined total of the companies’ home sales in the second quarter of 2009 was 4,797, according to last year’s earnings statements.
The purchase of Dallas-based Centex increased PulteGroup’s land holdings and sales to entry-level customers.
Second-quarter results included a net benefit from income taxes of $82 million. The company had about $45 million in land and mortgage-related charges for the quarter, compared with $130 million a year earlier.
The drop in demand after a tax benefit for homebuyers expired “likely exceeded all expectations,” Dugas said. For buyers to qualify for the credit, they had to sign contracts by April 30. They have until Sept. 30 to complete their purchases.
“We need a stronger economy, job creation and better consumer confidence,” he said. “Our industry continues to face incredibly low demand.”
Housing starts in the U.S. fell to an annual pace of 549,000 in June, down 5.8 percent from a year earlier, the Commerce Department reported July 20. New home sales in June rose to an annual pace of 330,000 from a record low of 267,000 in May, the department said last week.
PulteGroup’s shares fell 5 cents to $8.38 at 4:01 p.m. in New York Stock Exchange composite trading. They’re down 28 percent over the past year.