PulteGroup Stock Rises on Q1 Earnings & Revenue Beat

PulteGroup Inc. PHM has reported better-than-expected first-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. The company's performance continues to benefit from its diversified operations and strategic focus on balancing sales price and pace to maintain strong returns.President and CEO Ryan Marshall noted that while declining interest rates have helped stimulate buyer interest, affordability remains a challenge due to high home prices and stretched monthly payments. Despite short-term economic uncertainty affecting consumer demand, Marshall expressed confidence in the long-term strength of housing demand. He emphasized that PulteGroup’s balanced operating model and financial discipline position the company well to navigate a dynamic market environment and continue delivering value to stakeholders.Shares of this notable homebuilder gained 2.03% on Tuesday, following the earnings release.PulteGroup, Inc. Price, Consensus and EPS Surprise PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. QuoteInside PHM’s HeadlinesThe company reported adjusted earnings of $2.57 per share, which topped the Zacks Consensus Estimate of $2.47 by 4.1%. In the year-ago quarter, PHM reported adjusted earnings per share of $2.87. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)Total revenues of $3.89 billion also surpassed the consensus mark of $3.86 billion but decreased 1.4% from the year-ago figure of $3.95 billion.Segmental Discussion of PulteGroupPulteGroup primarily operates through two business segments — Homebuilding and Financial Services.Homebuilding: Revenues from this segment were down 1.4% year over year to $3.8 billion. We had expected Homebuilding revenues to decrease 0.8% year over year to $3.83 billion. Home sale revenues decreased 1.8% year over year to $3.75 billion. Land sale and other revenues increased 41.2% to $52.6 million from a year ago.The number of homes closed dropped 7% to 6,583 units (versus our projection of 6,754 units) from the year-ago level. The ASP of homes delivered was $570,000, up 6% year over year. We had predicted ASP of homes delivered to be $560,200.Net new home orders declined 7.3% year over year to 7,765 units (versus our expectation of 8,752 units). Yet, the value of new orders declined 4.7% from a year ago to $4.48 billion. The decline in net new orders was largely due to a drop in gross orders, as consumers continued to grapple with affordability pressures and heightened macroeconomic uncertainty.PHM’s backlog, which represents orders yet to be closed, was 11,335 units, down from 13,430 units a year ago. In addition, potential housing revenues from the backlog were down year over year to $7.22 billion from $8.2 billion.Home sales gross margin was down 210 basis points (bps) year over year to 27.5%. SG&A expenses (as a percentage of home sales revenues) expanded 110 bps to 10.5% from a year ago.Financial Services: Revenues from this segment dropped 1.7% year over year to $90.8 million. Pretax income for the segment declined to $36 million from $41 million a year ago, due to lower closing volumes in the company’s homebuilding operations.Sneak Peek at PulteGroup’s FinancialsAt the end of the first quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.28 billion, down from $1.65 billion at the end of 2024. Net debt-to-capital was 2.8% at the first-quarter end against (0.3)% in 2024-end.Net cash provided by operating activities was $134.2 million in the first quarter, down from $239.8 million in the prior-year period.In the quarter, the company repurchased 2.8 million common shares for $300 million at an average price of $108.03 per share.PHM’s Zacks Rank & Recent Construction ReleasesPulteGroup currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank ( Strong Buy) stocks here.D.R. Horton, Inc. DHI reported dismal second-quarter fiscal 2025 (ended March 31, 2025) results, with earnings and total revenues missing Zacks Consensus Estimate and decreasing on a year-over-year basis.D.R. Horton now expects consolidated revenues to be in the range of $33.3-$34.8 billion, down from the previously expected range of $36-$37.5 billion. This compares with $36.8 billion in fiscal 2024. Homes closed are anticipated to be within 85,000-87,000 homes, down from the previously expected range of 90,000-92,000 units. This compares with 89,690 homes closed in fiscal 2024.KB Home KBH reported lackluster fiscal first-quarter 2025 results. The quarter’s earnings and total revenues missed the Zacks Consensus Estimate and tumbled year over year.KB Home’s results reflect the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Besides, the ongoing macroeconomic uncertainties and other regulatory changes in the country are adding to the instability of the housing market. Owing to these market uncertainties and a lower net order level at the end of the quarter, KB Home lowered its fiscal 2025 guidance.Lennar Corporation LEN reported first-quarter fiscal 2025 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top line increased but the bottom line declined.Lennar’s performance was impacted by a challenging macroeconomic environment. Although demand remained strong, higher interest rates, inflation and weak consumer confidence made homeownership less accessible. A limited supply of affordable homes added to the difficulties, leading to a decline in the company's average sales price. Moving forward to fiscal 2025, to counter the market uncertainties, Lennar aims to focus on its volume-based strategy to drive sales and implement an asset-light, land-light business model.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PulteGroup, Inc. (PHM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report Lennar Corporation (LEN): Free Stock Analysis Report D.R. Horton, Inc. (DHI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks