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) Q4 Earnings, Revenues Beat on Solid Housing
Read MoreHide Full Article
PulteGroup Inc. (PHM - Free Report) reported solid results for fourth-quarter 2021. Both earnings and revenues topped the Zacks Consensus Estimate and improved year over year on the back of a solid housing market backdrop and resilient economy.
Shares of this homebuilder gained nearly 3% in the pre-market trading session, following the earnings release.
Ryan Marshall, president and CEO of PulteGroup, said, “Given the country’s resilient economy, outstanding job market, rising wages and an ongoing desire for home ownership, we anticipate the strong buyer demand we realized in 2021 to continue in the year ahead. Although ongoing supply chain disruptions continue to challenge our industry, we believe that our size, growing community count and an available inventory of new homes have us well positioned to grow our business in 2022 while continuing to deliver exceptional returns.”
Inside the Headlines
Adjusted earnings per share came in at $2.51, surpassing the consensus mark of $2.29 by 9.6%. Earnings grew 64.1% from $1.53 per share a year ago. The upside was driven by gains in home closings, strong revenues, improved gross margin and overhead leverage.
PulteGroup, Inc. Price, Consensus and EPS Surprise
Total revenues of $4.36 billion topped the consensus mark of $4.16 billion by 4.7%. Revenues increased 36.5% from the year-ago figure of $3.19 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 37.9% year over year to $4.26 billion. Home sale revenues of $4.22 billion also improved 38% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues also improved 55.2% from a year ago to $37.2 million.
The number of homes closed increased 25.5% year over year to 8,611 units. Home closings grew across all operating regions served, barring West. The average selling price of homes delivered was $490,000, up 10% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 18,003 units, up 19% year over year. In addition, potential housing revenues from backlog increased 45% from the prior-year quarter to $9.9 billion.
Yet, new home orders dropped 4% year over year to 6,769 units for the quarter due to 7% lower average community count and the company’s actions to limit the rate of sales in many of its communities. Home orders were down across all operating regions served. That said, the value of new orders improved 16% from a year ago to $3.8 billion.
Margins
Home sales gross margin was up 180 basis points (bps) year over year to 26.8% for the quarter. Adjusted operating margin grew 280 bps to 18.1% year over year. SG&A expenses (as a percentage of home sales revenues) improved 100 bps year over year to 8.7%.
Revenues from the Financial Services segment declined 4.8% year over year to $100.9 million. Pretax income for the segment increased to $55 million from $43 million a year ago. Benefits from higher mortgage originations resulting from growth in homebuilding operations were offset by the impacts of a more competitive operating environment.
Financials
At December 2021-end, cash and cash equivalents were $1.78 billion, down from $2.58 billion at 2020-end. Debt to total capital of 21.3% at 2021-end was down from 29.5% at 2020-end.
In 2021, it repurchased 17.7 million common shares for an average price of $50.80 per share totaling $897 million.
Otis Worldwide Corporation (OTIS - Free Report) reported strong earnings for fourth-quarter 2021. Its earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Weyerhaeuser Company (WY - Free Report) reported fourth-quarter 2021 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate despite persistent supply-chain challenges and the ongoing pandemic.
Meritage Homes Corporation (MTH - Free Report) reported solid fourth-quarter 2021 results. Earnings surpassed the Zacks Consensus Estimate and improved significantly on a year-over-year basis. Revenues also improved from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
PulteGroup (PHM) Q4 Earnings, Revenues Beat on Solid Housing
PulteGroup Inc. (PHM - Free Report) reported solid results for fourth-quarter 2021. Both earnings and revenues topped the Zacks Consensus Estimate and improved year over year on the back of a solid housing market backdrop and resilient economy.
Shares of this homebuilder gained nearly 3% in the pre-market trading session, following the earnings release.
Ryan Marshall, president and CEO of PulteGroup, said, “Given the country’s resilient economy, outstanding job market, rising wages and an ongoing desire for home ownership, we anticipate the strong buyer demand we realized in 2021 to continue in the year ahead. Although ongoing supply chain disruptions continue to challenge our industry, we believe that our size, growing community count and an available inventory of new homes have us well positioned to grow our business in 2022 while continuing to deliver exceptional returns.”
Inside the Headlines
Adjusted earnings per share came in at $2.51, surpassing the consensus mark of $2.29 by 9.6%. Earnings grew 64.1% from $1.53 per share a year ago. The upside was driven by gains in home closings, strong revenues, improved gross margin and overhead leverage.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Total revenues of $4.36 billion topped the consensus mark of $4.16 billion by 4.7%. Revenues increased 36.5% from the year-ago figure of $3.19 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 37.9% year over year to $4.26 billion. Home sale revenues of $4.22 billion also improved 38% year over year, mainly due to higher deliveries and average price of homes closed. Land sale revenues also improved 55.2% from a year ago to $37.2 million.
The number of homes closed increased 25.5% year over year to 8,611 units. Home closings grew across all operating regions served, barring West. The average selling price of homes delivered was $490,000, up 10% year over year.
Importantly, its backlog — which represents orders yet to be closed — was 18,003 units, up 19% year over year. In addition, potential housing revenues from backlog increased 45% from the prior-year quarter to $9.9 billion.
Yet, new home orders dropped 4% year over year to 6,769 units for the quarter due to 7% lower average community count and the company’s actions to limit the rate of sales in many of its communities. Home orders were down across all operating regions served. That said, the value of new orders improved 16% from a year ago to $3.8 billion.
Margins
Home sales gross margin was up 180 basis points (bps) year over year to 26.8% for the quarter. Adjusted operating margin grew 280 bps to 18.1% year over year. SG&A expenses (as a percentage of home sales revenues) improved 100 bps year over year to 8.7%.
Revenues from the Financial Services segment declined 4.8% year over year to $100.9 million. Pretax income for the segment increased to $55 million from $43 million a year ago. Benefits from higher mortgage originations resulting from growth in homebuilding operations were offset by the impacts of a more competitive operating environment.
Financials
At December 2021-end, cash and cash equivalents were $1.78 billion, down from $2.58 billion at 2020-end. Debt to total capital of 21.3% at 2021-end was down from 29.5% at 2020-end.
In 2021, it repurchased 17.7 million common shares for an average price of $50.80 per share totaling $897 million.
Zacks Rank
PulteGroup currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Few Recent Construction Releases
Otis Worldwide Corporation (OTIS - Free Report) reported strong earnings for fourth-quarter 2021. Its earnings surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. Sales improved from the year-ago figure but lagged the consensus mark marginally.
Weyerhaeuser Company (WY - Free Report) reported fourth-quarter 2021 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate despite persistent supply-chain challenges and the ongoing pandemic.
Meritage Homes Corporation (MTH - Free Report) reported solid fourth-quarter 2021 results. Earnings surpassed the Zacks Consensus Estimate and improved significantly on a year-over-year basis. Revenues also improved from the year-ago period on the back of a strong housing market, thanks to the ongoing shortage of housing inventory, low-interest rates, and favorable homebuying trends from millennials and baby boomers.