PulteGroup Quarterly Profit Falls as Tax Costs IncreasePrashant Gopal
PulteGroup Inc., the second-largest U.S. homebuilder by market value, said net income fell in the first quarter as new-home sales declined nationwide and the company incurred a higher tax expense.
Net income declined to $74.8 million, or 19 cents a share, from $81.8 million, or 21 cents, a year earlier, the Bloomfield Hills, Michigan-based company said today in a statement. The average of 19 analyst estimates was for earnings of 20 cents a share, according to data compiled by Bloomberg.
PulteGroup and other builders have been raising prices and building larger homes that appeal to move-up buyers as tight credit reduces demand from first-time buyers. New-home sales fell 14.5 percent last month to a 384,000 annualized pace, lower than any forecast of economists surveyed by Bloomberg and the weakest since July, Commerce Department data showed yesterday.
“We continue to believe housing is in the early stages of a multiyear recovery benefiting from low interest rates, low inventory and continued relative affordability of homes,” Chief Executive Officer Richard Dugas said in the statement.
First-quarter profit was hurt by a tax expense of $55.2 million, or 14 cents a share, according to the statement. That compares with $588,000, or less than 1 cent a share, a year earlier. Pretax income increased 58 percent to $130 million, PulteGroup said.
The company’s houses sold for an average of $317,000 in the first quarter, up 10 percent from a year earlier. Net new orders fell 6 percent to 4,863 homes, while revenue declined to $1.12 billion from $1.16 billion.
Earnings were announced before the start of regular U.S. trading. PulteGroup was little changed at $18.57 yesterday. The stock fell 8.8 percent this year through yesterday, compared with a 7.3 percent decline for the 11-company Standard & Poor’s Supercomposite Homebuilding Index. Lennar Corp is the largest U.S. homebuilder by market value.