We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PulteGroup (PHM) Q3 Earnings, Revenues Miss on Supply Chain Woes
Read MoreHide Full Article
PulteGroup Inc. (PHM - Free Report) reported third-quarter 2021 results, wherein earnings and revenues missed the Zacks Consensus Estimate, as major disruptions in the manufacture and supply of building products have been extending overall build cycles. Shares of this homebuilder dropped 0.4% in the pre-market trading session, following the earnings release.
Nonetheless, both earnings and revenues grew year over year buoyed by solid demand trends and higher pricing. Ryan Marshall, president and chief executive officer of PulteGroup, highlighted, “Our strong operating results and resulting cash flow also allowed the Company to invest $1.1 billion in land acquisition and development in the quarter, while returning $261 million to our shareholders through share repurchases."
Inside the Headlines
Adjusted earnings per share came in at $1.82, missing the consensus mark of $1.83. Earnings grew 36% from $1.34 per share a year ago.
Total revenues of $3.48 billion missed the consensus mark of $3.52 billion, marking the third consecutive quarter of revenue miss. Revenues increased 17.7% from the year-ago figure of $2.95 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 18.9% year over year to $3.39 billion. Home sale revenues of $3.32 billion also improved 17.7% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues improved 161.1% from a year ago to $63.1 million.
The number of homes closed increased 9% year over year to 7,007. Home closings grew across all operating regions served, barring West. The average selling price of homes delivered was $474,000, up 8% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 19,845 units, up 32.6% year over year. In addition, potential housing revenues from backlog increased 56% from the prior-year quarter to $10.3 billion.
Yet, new home orders dropped 17% year over year to 6,796 units for the quarter due to lower community count. Home orders were down across all operating regions served. That said, value of new orders improved 4% from a year ago to $3.8 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
Home sales gross margin was up 200 basis points (bps) year over year to 26.5% for the quarter. Furthermore, operating margin expanded 200 bps to 16.9%, as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) remained unchanged year over year at 9.6%.
Revenues from the Financial Services segment declined 14.4% year over year to $91.5 million. Pretax income for the segment was down to $49 million from $64 million a year ago. Higher loan volumes were offset by a competitive pricing environment.
Financials
As of Sep 30, 2021, cash and cash equivalents were $1.57 billion, down from $1.66 billion at second quarter-end. Debt to total capital of 22.4% at third quarter-end was down from 22.7% at second quarter-end. In the quarter, the company repurchased 2% of outstanding shares for $261 million.
NVR, Inc. (NVR - Free Report) — currently has a Zacks Rank #3 — reported lower-than-expected earnings for third-quarter 2021. Nonetheless, both the top and bottom lines improved impressively from the year-ago period on the back of solid demand.
Lennar Corporation (LEN - Free Report) — which currently has a Zacks Rank #3 — reported third-quarter fiscal 2021 (ended Aug 31, 2021) results. Quarterly earnings topped the Zacks Consensus Estimate but revenues missed the same, thanks to unprecedented supply chain challenges. Also, the company’s quarterly deliveries came below the guided range.
KB Home (KBH - Free Report) — currently holding a Zacks Rank #3 — reported third-quarter fiscal 2021 (ended Aug 31, 2021) results. Although earnings surpassed the Zacks Consensus Estimate, revenues missed the same owing to supply chain disruptions and labor shortages. Nonetheless, earnings and revenues grew significantly from a year ago, buoyed by strong housing market demand.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
PulteGroup (PHM) Q3 Earnings, Revenues Miss on Supply Chain Woes
PulteGroup Inc. (PHM - Free Report) reported third-quarter 2021 results, wherein earnings and revenues missed the Zacks Consensus Estimate, as major disruptions in the manufacture and supply of building products have been extending overall build cycles. Shares of this homebuilder dropped 0.4% in the pre-market trading session, following the earnings release.
Nonetheless, both earnings and revenues grew year over year buoyed by solid demand trends and higher pricing. Ryan Marshall, president and chief executive officer of PulteGroup, highlighted, “Our strong operating results and resulting cash flow also allowed the Company to invest $1.1 billion in land acquisition and development in the quarter, while returning $261 million to our shareholders through share repurchases."
Inside the Headlines
Adjusted earnings per share came in at $1.82, missing the consensus mark of $1.83. Earnings grew 36% from $1.34 per share a year ago.
Total revenues of $3.48 billion missed the consensus mark of $3.52 billion, marking the third consecutive quarter of revenue miss. Revenues increased 17.7% from the year-ago figure of $2.95 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 18.9% year over year to $3.39 billion. Home sale revenues of $3.32 billion also improved 17.7% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues improved 161.1% from a year ago to $63.1 million.
The number of homes closed increased 9% year over year to 7,007. Home closings grew across all operating regions served, barring West. The average selling price of homes delivered was $474,000, up 8% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 19,845 units, up 32.6% year over year. In addition, potential housing revenues from backlog increased 56% from the prior-year quarter to $10.3 billion.
Yet, new home orders dropped 17% year over year to 6,796 units for the quarter due to lower community count. Home orders were down across all operating regions served. That said, value of new orders improved 4% from a year ago to $3.8 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Margins
Home sales gross margin was up 200 basis points (bps) year over year to 26.5% for the quarter. Furthermore, operating margin expanded 200 bps to 16.9%, as adjusted homebuilding SG&A expenses (as a percentage of home sales revenues) remained unchanged year over year at 9.6%.
Revenues from the Financial Services segment declined 14.4% year over year to $91.5 million. Pretax income for the segment was down to $49 million from $64 million a year ago. Higher loan volumes were offset by a competitive pricing environment.
Financials
As of Sep 30, 2021, cash and cash equivalents were $1.57 billion, down from $1.66 billion at second quarter-end. Debt to total capital of 22.4% at third quarter-end was down from 22.7% at second quarter-end. In the quarter, the company repurchased 2% of outstanding shares for $261 million.
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.
NVR, Inc. (NVR - Free Report) — currently has a Zacks Rank #3 — reported lower-than-expected earnings for third-quarter 2021. Nonetheless, both the top and bottom lines improved impressively from the year-ago period on the back of solid demand.
Lennar Corporation (LEN - Free Report) — which currently has a Zacks Rank #3 — reported third-quarter fiscal 2021 (ended Aug 31, 2021) results. Quarterly earnings topped the Zacks Consensus Estimate but revenues missed the same, thanks to unprecedented supply chain challenges. Also, the company’s quarterly deliveries came below the guided range.
KB Home (KBH - Free Report) — currently holding a Zacks Rank #3 — reported third-quarter fiscal 2021 (ended Aug 31, 2021) results. Although earnings surpassed the Zacks Consensus Estimate, revenues missed the same owing to supply chain disruptions and labor shortages. Nonetheless, earnings and revenues grew significantly from a year ago, buoyed by strong housing market demand.