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PulteGroup (PHM) Q1 Earnings Beat, Revenues Miss, Stock Down
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PulteGroup Inc. (PHM - Free Report) reported first-quarter 2021 results, wherein earnings handily surpassed the Zacks Consensus Estimate, buoyed by solid housing market momentum. However, shares of this homebuilder slipped 2.4% in the pre-market trading session following the earnings release, wherein the company’s revenues missed the consensus mark.
That said, Ryan Marshall, president and chief executive officer of PulteGroup, highlighted, “The year has gotten off to an outstanding start with strong demand across all of our markets and buyer groups which helped drive a 31% increase in net new orders, including a 49% gain in active-adult sales,” said Ryan Marshall, PulteGroup President and CEO.
Inside the Headlines
Adjusted earnings per share came in at $1.28, beating the consensus mark of $1.19 by 7.6%. The bottom line also grew from 80 cents per share a year ago.
Total revenues of $2.72 billion missed the consensus mark by 3.6% but increased 18.9% from the year-ago figure of $2.29 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 17.1% year over year to $2.62 billion. Home sale revenues of $2.59 billion also improved 16.9% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues improved 43.4% from a year ago to $27.2 million.
The number of homes closed increased 12% year over year to 6,044. Home closings grew across most of the operating regions served. Average selling price of homes delivered was $430,000, up 4% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 18,966, up 50% year over year. In addition, potential housing revenues from backlog increased 58.1% from the prior-year quarter to $8.8 billion.
Importantly, new home orders grew 31% year over year to 9,852 units for the quarter. Home orders were up across all operating regions served. Value of new orders also improved 42% from a year ago to $4.6 billion.
Margins
Home sales gross margin was up 180 basis points (bps) year over year to 25.5% for the quarter. Furthermore, adjusted operating margin expanded 280 bps to 14.6% as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) improved 100 bps year over year to 10.9%.
Revenues from the Financial Services segment improved 94.5% year over year to $106.1 million. Pretax income for the segment more than tripled from a year ago to $66 million.
Financials
As of Mar 31, 2021, cash and cash equivalents were $1.58 billion, down from $2.58 billion at 2020-end. Debt to total capital of 23.3% at first quarter-end was down from 29.5% at 2020-end. In the quarter, the company repurchased 3.3 million common shares for $154 million, or an average price of $46.11 per share.
D.R. Horton, Inc. (DHI - Free Report) reported solid second-quarter fiscal 2021 results. Its earnings and revenues handily beat the respective Zacks Consensus Estimate, given the company’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
NVR, Inc. (NVR - Free Report) reported better-than-expected results for first-quarter 2021. Earnings not only beat estimates for the third straight quarter but also improved significantly year over year. The results benefited from robust demand for new homes on lower mortgage rates and a rising work-from-home trend in the United States.
KB Home (KBH - Free Report) posted impressive first-quarter fiscal 2021 results, mainly attributable to a favorable pricing environment due to robust housing market demand, increased operating leverage on higher revenues and lower amortization of previously capitalized interest.
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PulteGroup (PHM) Q1 Earnings Beat, Revenues Miss, Stock Down
PulteGroup Inc. (PHM - Free Report) reported first-quarter 2021 results, wherein earnings handily surpassed the Zacks Consensus Estimate, buoyed by solid housing market momentum. However, shares of this homebuilder slipped 2.4% in the pre-market trading session following the earnings release, wherein the company’s revenues missed the consensus mark.
That said, Ryan Marshall, president and chief executive officer of PulteGroup, highlighted, “The year has gotten off to an outstanding start with strong demand across all of our markets and buyer groups which helped drive a 31% increase in net new orders, including a 49% gain in active-adult sales,” said Ryan Marshall, PulteGroup President and CEO.
Inside the Headlines
Adjusted earnings per share came in at $1.28, beating the consensus mark of $1.19 by 7.6%. The bottom line also grew from 80 cents per share a year ago.
Total revenues of $2.72 billion missed the consensus mark by 3.6% but increased 18.9% from the year-ago figure of $2.29 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 17.1% year over year to $2.62 billion. Home sale revenues of $2.59 billion also improved 16.9% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues improved 43.4% from a year ago to $27.2 million.
The number of homes closed increased 12% year over year to 6,044. Home closings grew across most of the operating regions served. Average selling price of homes delivered was $430,000, up 4% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 18,966, up 50% year over year. In addition, potential housing revenues from backlog increased 58.1% from the prior-year quarter to $8.8 billion.
Importantly, new home orders grew 31% year over year to 9,852 units for the quarter. Home orders were up across all operating regions served. Value of new orders also improved 42% from a year ago to $4.6 billion.
Margins
Home sales gross margin was up 180 basis points (bps) year over year to 25.5% for the quarter. Furthermore, adjusted operating margin expanded 280 bps to 14.6% as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) improved 100 bps year over year to 10.9%.
Revenues from the Financial Services segment improved 94.5% year over year to $106.1 million. Pretax income for the segment more than tripled from a year ago to $66 million.
Financials
As of Mar 31, 2021, cash and cash equivalents were $1.58 billion, down from $2.58 billion at 2020-end. Debt to total capital of 23.3% at first quarter-end was down from 29.5% at 2020-end. In the quarter, the company repurchased 3.3 million common shares for $154 million, or an average price of $46.11 per share.
Zacks Rank & Peer Releases
PulteGroup 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 - Free Report) reported solid second-quarter fiscal 2021 results. Its earnings and revenues handily beat the respective Zacks Consensus Estimate, given the company’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
NVR, Inc. (NVR - Free Report) reported better-than-expected results for first-quarter 2021. Earnings not only beat estimates for the third straight quarter but also improved significantly year over year. The results benefited from robust demand for new homes on lower mortgage rates and a rising work-from-home trend in the United States.
KB Home (KBH - Free Report) posted impressive first-quarter fiscal 2021 results, mainly attributable to a favorable pricing environment due to robust housing market demand, increased operating leverage on higher revenues and lower amortization of previously capitalized interest.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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