PulteGroup Slides After Builder's Earnings Miss Estimatesby
Completions delayed by construction labor shortage, CEO says
Shares fall most since April; biggest drop among homebuilders
PulteGroup Inc., the third-largest U.S. homebuilder by market value, fell the most in six months after reporting lower-than-expected earnings for the third quarter as labor shortages delayed completions.
Net income dropped to $108 million, or 30 cents a share, from $141 million, or 37 cents, a year earlier, the Atlanta-based company said Thursday in a statement. The average of 14 analyst estimates was for earnings of 43 cents a share, according to data compiled by Bloomberg.
PulteGroup joins a list of companies that have pointed to a scarcity of tradesmen for a slowdown in home completions. The labor shortage, which began in isolated pockets soon after new-home sales hit bottom four years ago, is deepening as the improving job market fuels buyer demand. Many carpenters, electricians and roofers who lost jobs during the crash haven’t returned because they found other work, aged out of the industry or, in the case of some immigrants, left the country.
Delays caused by construction bottlenecks “are taking longer than expected to correct,” PulteGroup’s chief executive officer, Richard Dugas, said on a conference call with analysts. “Resource constraints, particularly as it relates to labor, exist across a number of our markets, and are continuing to hinder our progress.”
PulteGroup fell 6.6 percent, the most since April 23, to close at $18.16. It was the biggest decline in the 12-company Standard & Poor’s Supercomposite Homebuilding Index, which slipped 1.4 percent.
The company delivered 4,356 houses in the quarter, a 6 percent decrease from a year earlier. The average selling price climbed 1 percent to $336,000. New orders rose 8 percent to 4,092 homes, PulteGroup said.