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PulteGroup Inc. (PHM - Free Report) reported fourth-quarter 2020 results, wherein earnings and revenues handily surpassed the respective Zacks Consensus Estimate, buoyed by solid housing market momentum. Ryan Marshall, president and chief executive officer of PulteGroup, pointed out, "Our fourth quarter and full-year 2020 performance enable PulteGroup to enter 2021 with tremendous momentum supported by our outstanding operating metrics and a backlog of more than 15,000 homes.”
Inside the Headlines
Adjusted earnings per share came in at $1.49, beating the consensus mark of $1.38 by 8%. The bottom line also grew 30.7% year over year.
Total revenues of $3.19 billion surpassed the consensus mark by 3.8% and increased 5.8% from the year-ago figure of $3.02 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 4.7% year over year to $3.09 billion. Home sale revenues of $3.06 billion also improved 4.7% year over year, mainly due to higher average price of homes closed. Land sale revenues improved 9.8% from a year ago to $23.9 million.
The number of homes closed increased 1% year over year to 6,860. Home closings grew across most of the operating regions served (barring Southeast, Midwest and Texas). Average selling price of homes delivered was $446,000, up 4% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 15,158, up 44% year over year. In addition, potential housing revenues from backlog increased 49.8% from the prior-year quarter to $6.8 billion.
However, new home orders grew 24% year over year to 7,056 units for the quarter. Home orders were up across all operating regions served. Value of new orders also improved 33% from a year ago to $3.3 billion.
Margins
Home sales gross margin was up 220 basis points (bps) year over year to 25% for the quarter. Furthermore, adjusted operating margin expanded 250 bps to 15.3% as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) improved 30 bps year over year.
Revenues from the Financial Services segment improved 51.8% year over year to $105.9 million. The segment generated a pre-tax income of $43 million, up 26.5% from a year ago.
Financials
As of Dec 31, 2020, cash and cash equivalents were $2.58 billion, up from $1.22 billion at 2019-end. Debt to total capital of 29.5% at 2020-end was down from 33.6% at 2019-end. In 2020, the company repurchased 4.5 million common shares, or approximately 2% of outstanding shares, for $171 million, or an average price of $37.58 per share.
Meritage Homes Corporation (MTH - Free Report) reported fourth-quarter 2020 results, with earnings and revenues surpassing the respective Zacks Consensus Estimate by 18.2% and 8.7%. Also, earnings and revenues grew 49.8% and 24%, respectively, on a year-over-year basis.
D.R. Horton, Inc. (DHI - Free Report) recently reported first-quarter fiscal 2021 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder also increased full-year expectations, reflecting the company’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
KB Home (KBH - Free Report) ended fiscal 2020 on an impressive note, with fourth-quarter fiscal 2020 revenues and earnings beating analysts’ expectations. Owing to solid net housing orders, the company expects to achieve notable growth in revenues and earnings in fiscal 2021.
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PulteGroup (PHM) Q4 Earnings & Revenue Beat Estimates
PulteGroup Inc. (PHM - Free Report) reported fourth-quarter 2020 results, wherein earnings and revenues handily surpassed the respective Zacks Consensus Estimate, buoyed by solid housing market momentum. Ryan Marshall, president and chief executive officer of PulteGroup, pointed out, "Our fourth quarter and full-year 2020 performance enable PulteGroup to enter 2021 with tremendous momentum supported by our outstanding operating metrics and a backlog of more than 15,000 homes.”
Inside the Headlines
Adjusted earnings per share came in at $1.49, beating the consensus mark of $1.38 by 8%. The bottom line also grew 30.7% year over year.
Total revenues of $3.19 billion surpassed the consensus mark by 3.8% and increased 5.8% from the year-ago figure of $3.02 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 4.7% year over year to $3.09 billion. Home sale revenues of $3.06 billion also improved 4.7% year over year, mainly due to higher average price of homes closed. Land sale revenues improved 9.8% from a year ago to $23.9 million.
The number of homes closed increased 1% year over year to 6,860. Home closings grew across most of the operating regions served (barring Southeast, Midwest and Texas). Average selling price of homes delivered was $446,000, up 4% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 15,158, up 44% year over year. In addition, potential housing revenues from backlog increased 49.8% from the prior-year quarter to $6.8 billion.
However, new home orders grew 24% year over year to 7,056 units for the quarter. Home orders were up across all operating regions served. Value of new orders also improved 33% from a year ago to $3.3 billion.
Margins
Home sales gross margin was up 220 basis points (bps) year over year to 25% for the quarter. Furthermore, adjusted operating margin expanded 250 bps to 15.3% as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) improved 30 bps year over year.
Revenues from the Financial Services segment improved 51.8% year over year to $105.9 million. The segment generated a pre-tax income of $43 million, up 26.5% from a year ago.
Financials
As of Dec 31, 2020, cash and cash equivalents were $2.58 billion, up from $1.22 billion at 2019-end. Debt to total capital of 29.5% at 2020-end was down from 33.6% at 2019-end. In 2020, the company repurchased 4.5 million common shares, or approximately 2% of outstanding shares, for $171 million, or an average price of $37.58 per share.
Zacks Rank & Peer Releases
PulteGroup currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meritage Homes Corporation (MTH - Free Report) reported fourth-quarter 2020 results, with earnings and revenues surpassing the respective Zacks Consensus Estimate by 18.2% and 8.7%. Also, earnings and revenues grew 49.8% and 24%, respectively, on a year-over-year basis.
D.R. Horton, Inc. (DHI - Free Report) recently reported first-quarter fiscal 2021 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder also increased full-year expectations, reflecting the company’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
KB Home (KBH - Free Report) ended fiscal 2020 on an impressive note, with fourth-quarter fiscal 2020 revenues and earnings beating analysts’ expectations. Owing to solid net housing orders, the company expects to achieve notable growth in revenues and earnings in fiscal 2021.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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