Here's What Investors Must Know Ahead of PulteGroup's Q2 Earnings

Core Viewpoint - PulteGroup Inc. is expected to report a decline in earnings and revenues for the second quarter of 2025, primarily due to ongoing affordability challenges in the housing market and high mortgage rates impacting homebuyers [1][2][3]. Revenue Summary - The Zacks Consensus Estimate for Q2 2025 EPS has decreased to $2.93, reflecting an 18.2% decline from the previous year's EPS of $3.58 [2]. - Revenue is projected at $4.39 billion, indicating a 4.5% year-over-year decline [2]. - Home closings are expected to be between 7,400 and 7,800 units, down from 8,097 units a year ago, with a predicted decline of 6.6% year over year to 7,561 units [3][4]. Segment Performance - Homebuilding revenues, which contributed 97.4% to total revenues in Q1 2025, are expected to decrease by 4.3% year over year to $4.3 billion due to lower home closings [4]. - Financial services revenues, contributing 2.6% to total revenues in Q1, are expected to increase by 1.4% year over year to $113.2 million [4]. Pricing and Margins - The average selling price (ASP) for homes is expected to rise between $560,000 and $570,000, compared to $549,000 a year ago, with a predicted increase of 2.4% year over year to $562,200 [5][6]. - Gross margin is anticipated to shrink to 26.7% from 29.9% last year, impacted by higher buyer incentives and cost pressures [6][7]. Orders and Backlogs - Net new orders are expected to increase by 2.1% year over year to 7,811 units, while total backlog is projected to decline by 10.8% to 11,585 units, with the total backlog value decreasing by 7.3% year over year to $7.51 billion [8]. Earnings Prediction - The model indicates that PulteGroup may not achieve an earnings beat this quarter, with an Earnings ESP of -1.27% and a Zacks Rank of 4 (Sell) [9].