PulteGroup Inc. (PHM) reported stellar results in second-quarter 2024, wherein earnings and revenues handily beat the Zacks Consensus Estimate.In the second quarter of 2024, PulteGroup saw significant benefits from key factors driving its success. The company's balanced operating model resulted in increases in closings, average sales price, and gross margin, which collectively led to a 19.3% increase in earnings per share (EPS). Strong cash flows provided the flexibility to invest in business growth, return ...

krblokhin PulteGroup, Inc. (NYSE:PHM) has been a strong performer over the past year, rising over 55%, as the housing market has proven resilient amid substantially higher interest rates. On Tuesday, Pulte reported solid earnings, but shares dropped 2% in response, likely as its strong rally has caused some profit taking. I last covered Pulte in April, rating shares a buy. Since that recommendation, PHM has rallied 8%, a solid total return, but a bit below the market’s 9% rally. Seeking Alpha In the c ...

Financial Data and Key Metrics Changes - PulteGroup reported second quarter home sale revenues of $4.4 billion, a 10% increase from the same period in 2023, driven by an 8% increase in closings to 8,097 homes and a 2% increase in average sales price to $549,000 [14][23] - Earnings per share reached a record $3.83, reflecting a 19% increase year-over-year [7][23] - Return on equity for the trailing 12-month period was 27.1% [7] Business Line Data and Key Metrics Changes - The average sales price for homes was $549,000, with product options and lot premiums averaging $104,000 per home, representing approximately 19% of the average sales price [8][14] - Closings in the second quarter consisted of 40% first-time buyers, 37% move-up buyers, and 23% active adult buyers, compared to 41%, 34%, and 25% respectively in the same quarter last year [15] - Net new orders decreased by 4% year-over-year, with a notable 17% decrease among active adult buyers [15][17] Market Data and Key Metrics Changes - The company noted a supply imbalance in the housing market, with existing homeowners reluctant to sell due to low-rate mortgages, contributing to a housing deficit of several million homes [9][10] - Inventory levels in Southwest Florida approached nine months, indicating a slight oversupply, while markets in Texas also showed increased inventory levels [40][60] - The company observed a cautious buyer sentiment due to high prices and interest rates, impacting demand [11][60] Company Strategy and Development Direction - PulteGroup aims to balance price, pace, and investment to generate superior returns, focusing on turning assets efficiently [6][12] - The company is increasing its use of land bankers to build a more efficient land pipeline, with lots controlled via option increasing to 53% of total lots [12][25] - The company expects to close approximately 31,000 homes for the full year and aims for a growth rate of 5% to 10% in 2025 [13][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term housing demand trends despite short-term fluctuations in buyer demand [10][11] - The company anticipates a challenging environment in the second half of the year, with expected gross margins of approximately 29% in Q3 and 28.5% to 29% in Q4 [21][62] - Management highlighted the importance of adjusting pricing and incentives to meet buyer needs in a competitive market [11][66] Other Important Information - The company repurchased 2.8 million shares at a cost of $314 million in Q2, with a total of 5.1 million shares repurchased year-to-date [25][26] - PulteGroup's debt-to-capital ratio is now 12.8%, the lowest level since before acquiring Del Webb in 2001 [26] - Fitch upgraded the company's debt rating to BBB+, and Moody's upgraded its outlook to positive [26] Q&A Session Summary Question: Gross margin outlook and land banking impact - Management indicated that the West region's lower margins are factored into the margin guidance for Q3 and Q4, with a potential 200 to 300 basis point trade-off between margin and return as land banking increases [33][34] Question: Cycle times and ICG update - Cycle times for closings were reported at 123 days, with some divisions achieving below the 100-day target [35][36] - ICG is performing well, with plans for a third plant being finalized [37] Question: Inventory levels in Florida and Texas - Management noted elevated inventory levels in Southwest Florida and parts of Texas but does not consider it concerning, expecting a market adjustment [40][41] Question: Cash flow and share repurchase plans - The cash flow guidance remains at $1.8 billion, with management indicating continued share repurchases [42][43] Question: Impact of potential rate cuts on gross margin - Management stated that the impact of lower rates would depend on the economic context, with potential for margins to benefit if rates decrease in a healthy economy [45][46] Question: Stick and brick costs and inflation outlook - Stick and brick costs were reported at $80 per square foot, with expectations of manageable inflation in the low single digits for the remainder of the year [47][48] Question: Balance sheet and leverage considerations - Management emphasized the importance of capital allocation needs over leverage, indicating a preference for lower debt levels while still pursuing strategic investments [55][57]

PulteGroup (PHM) came out with quarterly earnings of $3.58 per share, beating the Zacks Consensus Estimate of $3.21 per share. This compares to earnings of $3 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.53%. A quarter ago, it was expected that this homebuilder would post earnings of $2.36 per share when it actually produced earnings of $2.87, delivering a surprise of 21.61%.Over the last four quarters, the company has s ...

FOR IMMEDIATE RELEASE Company Contact Investors: Jim Zeumer (404) 978-6434 Email: jim.zeumer@pultegroup.com PULTEGROUP REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS • Earnings Increased 19% to $3.83 Per Share • Home Sale Revenues Increased 10% to $4.4 Billion • Closings Increased 8% to 8,097 Homes; Average Sales Price Increased 2% to $549,000 • Home Sale Gross Margin Increased 30 Basis Points to 29.9% • Net New Orders Totaled 7,649 Homes with a Value of $4.4 Billion • Unit Backlog of 12,982 Homes with a Val ...

PulteGroup, Inc.’s (PHM) Homebuilding segment, which accounted for more than 98% of total revenues in 2023, is expected to have increased year over year when PHM reports second-quarter 2024 results on Jul 23.Despite challenges, PulteGroup showcased a robust performance so far this year, witnessing a stock surge of 20.9%. This growth has outpaced the Zacks Building Products - Home Builders industry's increase of 16.2%. The company's strategic focus on entry-level buyers, liquidity management, resilient opera ...

PulteGroup Inc. (PHM) is scheduled to report second-quarter 2024 results on Jul 23, before the opening bell.In the first quarter of 2024, PulteGroup demonstrated strong resilience in a high-rate environment. The company exceeded expectations with a 21.6% beat in earnings per share (EPS) and 10.1% in revenues. Year over year, adjusted EPS and revenues grew 22.1% and 10.4%, respectively. Despite market challenges, PulteGroup saw a 14% rise in net orders, increased net pricing in half of its communities, and a ...

For Immediate ReleaseChicago, IL – July 17, 2024 – Today, Zacks Equity Research discusses D.R. Horton, Inc. (DHI) , PulteGroup, Inc. (PHM) , Meritage Homes Corp. (MTH) , KB Home (KBH) and M/I Homes, Inc. (MHO) .Industry: HomebuildingLink: https://www.zacks.com/commentary/2302639/5-stocks-to-watch-from-the-promising-homebuilding-industryThe lack of existing homes for sale in the market, along with a desire to own a home, has been driving demand for the U.S. housing space, defying the challenges associated wi ...

Company Performance - PulteGroup (PHM) closed at $116.24, with a slight decline of -0.08% from the previous trading session, underperforming the S&P 500's gain of 0.28% [1] - Over the past month, PulteGroup's shares increased by 1.96%, outperforming the Construction sector's gain of 0.98% but underperforming the S&P 500's gain of 3.78% [1] - The upcoming earnings report is scheduled for July 23, 2024, with projected earnings per share (EPS) of $3.20, indicating a 6.67% increase year-over-year, and a revenue estimate of $4.48 billion, reflecting a 6.9% rise from the same quarter last year [1] Analyst Estimates - For the full year, Zacks Consensus Estimates project earnings of $12.89 per share and revenue of $17.34 billion, showing increases of +9.98% and +7.94% respectively from the previous year [2] - Recent modifications to analyst estimates indicate changing business trends, with positive revisions reflecting optimism about the company's profitability [2] Valuation Metrics - PulteGroup has a Forward P/E ratio of 9.02, which is a premium compared to the industry's average Forward P/E of 8.94 [3] - The company holds a PEG ratio of 0.51, which is lower than the average PEG ratio of 0.85 for the Building Products - Home Builders industry [3] Industry Overview - The Building Products - Home Builders industry is part of the Construction sector and currently holds a Zacks Industry Rank of 97, placing it in the top 39% of over 250 industries [4] - The Zacks Industry Rank assesses the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [4]

Core Viewpoint - PulteGroup, Inc. is navigating a challenging environment characterized by high mortgage rates, yet it has demonstrated resilience through effective strategies, resulting in positive financial performance and growth potential [1][2][9]. Group 1: Financial Performance - In Q1 2024, PulteGroup achieved a 14% year-over-year increase in net orders and set a new record for first-quarter gross margins at 29.6%, exceeding guidance of 28% to 28.5% [2][8]. - The company raised net pricing in over half of its communities, with price increases ranging from 1% to 5% across various markets [7][8]. - The Zacks Consensus Estimate for Q2 2024 EPS has increased from $3.18 to $3.20, indicating analyst optimism about the company's growth potential [9]. Group 2: Operating Model - PulteGroup maintains a balanced operating model with a 50/50 split between build-to-order and spec sales, allowing it to cater to diverse buyer preferences and respond effectively to market conditions [4][5]. - The company is leveraging its mortgage rate buydown program, offering fixed-rate mortgages around 5.75%, which has been utilized by approximately 25% of buyers, enhancing affordability and driving demand [6][9]. Group 3: Market Position and Valuation - Despite high borrowing costs affecting the housing market, PulteGroup benefits from low housing inventory and favorable demographic trends, which are expected to drive growth in the homebuilding sector [9]. - The stock has a forward P/E ratio of 8.1X, below the industry average of 9.5X, suggesting an attractive valuation for investors [10]. - PulteGroup's trailing 12-month ROE stands at 25.8%, significantly higher than the industry average of 16.8%, indicating efficient use of shareholders' funds [10]. Group 4: Shareholder Returns - PulteGroup has a history of paying quarterly dividends for nearly four decades, with a recent 5% increase to 20 cents per share, reflecting its commitment to returning cash to shareholders [11]. - The company is expected to generate substantial operating cash flow, projected at another $2 billion in 2024, supported by efforts to reduce construction cycle times [11].