PulteGroup Reports Lower Profit on Charges as Orders Fall
PulteGroup Inc. (PHM), the largest U.S. homebuilder by market value, reported a drop in second-quarter net income as it recorded one-time costs, while orders for new houses missed some analysts’ expectations.
Net income was $36.4 million, or 9 cents a share, compared with $42.4 million, or 11 cents, a year earlier, the Bloomfield Hills, Michigan-based company said today in a statement. The results included 17 cents a share in charges resulting from a contractual dispute, debt repurchases, and a planned relocation to Atlanta. The average of 16 analyst estimates was for profit of 30 cents a share, according to data compiled by Bloomberg.
PulteGroup has been decreasing its community count, contributing to a 12 percent drop in orders even as the nation’s housing market recovers. Sales (NHSLTOT) of new U.S. homes jumped 8.3 percent in June to the highest level since May 2008, the Commerce Department said yesterday.
“We had recognized that there was a risk that order growth could go negative in the quarter, but a 12 percent drop was a bit more than we thought could happen,” Megan McGrath, an analyst at MKM Partners LLC in Stamford, Connecticut, said in an e-mail.
Orders fell to 4,885 homes from 5,578, with 16 percent fewer communities. Analysts estimated orders of 5,801 homes, Jack Micenko, an analyst at Susquehanna International Group, wrote in a note to clients.
D.R. Horton Inc., the largest U.S. homebuilder by volume, today reported earnings that beat analysts estimates as sales surged. The company’s orders increased 12 percent, which was below analysts’ forecast of 28 percent growth, according to Adam Rudiger, an analyst at Wells Fargo & Co.
“The theme of questions today will certainly be around the pace of demand,” McGrath said.
PulteGroup’s total revenue rose to $1.28 billion from $1.07 billion a year earlier. The company sold 4,152 homes for an average price of $294,000, a 9 percent jump from a year earlier. Backlog, an indication of future revenue, climbed 25 percent to $2.7 billion.
The results were released before markets opened. PulteGroup fell 4.6 percent yesterday to $18.45. The stock has climbed 1.6 percent this year, compared with a 0.2 percent gain for the 11-company Standard & Poor’s Supercomposite Homebuilding Index.
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