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PulteGroup Inc. (PHM - Free Report) reported impressive fourth-quarter 2022 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
Shares of this notable homebuilder jumped 8.48% in the pre-market trading session on Jan 31.
Pertaining to the result, Ryan Marshall, PulteGroup’s president and CEO, stated, “Our strong fourth quarter results allowed PulteGroup to lower its debt-to-capital ratio to 18.7% and deliver a full year return on equity of 32.9%.”
Inside the Headlines
Adjusted earnings per share came in at $3.63, which topped the consensus mark of $2.88 by 26% and increased 45% from $2.51 per share a year ago. The upside was driven by gains in revenues, improved gross margins and overhead leverage.
PulteGroup, Inc. Price, Consensus and EPS Surprise
Total revenues of $5.17 billion also beat the consensus mark of $4.6 billion by 12.3% and increased 13.4% from the year-ago figure of $4.36 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 19.8% year over year to $5.1 billion. Home sale revenues of $5.05 billion increased 19.7% year over year, mainly due to the higher average price of homes closed. Land sale revenues also rose 22.3% from a year ago to $45.5 million.
The number of homes closed increased 3% from the year-ago level to 8,848 units. The average selling price of homes delivered was $571,000, up 17% year over year.
Most importantly, its backlog, which represents orders yet to be closed, was 12,169 units, down 32.4% year over year. In addition, potential housing revenues from backlog decreased 22.2% from the prior-year quarter to $7.67 billion.
New home orders dropped 41% year over year to 3,964 units for the quarter, owing to several headwinds like rising mortgage rates, lower affordability, lower consumer confidence and slowed demand. This resulted in a cancellation rate of 32%, up from 11% in the prior year period and 24% in the third quarter of 2022. Home orders were down across all operating regions served. The value of new orders also declined 43.1% from a year ago to $2.15 billion.
Home sales gross margin was up 200 bps year over year to 28.8% for the reported quarter. Adjusted SG&A expenses (as a percentage of home sales revenues) improved 50 bps to 8.2% from 8.7% a year ago. Adjusted operating margin increased by 250 bps year over year to 20.6%.
Revenues from the Financial Services segment declined 28.6% year over year to $72.1 million. Pretax income for the segment decreased to $24 million from $55 million a year ago. The decline was due to a reduction in loan volumes owing to a fall in capture rate to 75% compared with 85% last year and the more competitive pricing environment.
Financials
At the end of 2022, cash, cash equivalents and restricted cash were $1.09 billion, down from $1.83 billion in 2021-end. Net debt-to-capital was 9.6% at 2022-end, significantly up from 2.5% at 2021-end.
Net cash provided by operating activities was $668.5 million in 2022 versus $1,004 million in 2021.
In fourth-quarter 2022, the company repurchased 2.4 million common shares for $100 million at an average price of $41.81 per share. For 2022, PHM repurchased 24.2 million common shares for $1.1 billion at an average price of $44.48 per share.
D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate.
Yet, on a year-over-year basis, the metrics declined due to prevailing softness in the market.
United Rentals, Inc. (URI - Free Report) reported fourth-quarter 2022 results. Its earnings and revenues missed the Zacks Consensus Estimate but increased on a year-over-year basis on the back of sustained demand in its end markets and the strength of its core rental business.
URI provided solid full-year 2023 guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 1.5%. The company also plans to restart its share repurchase program, with the intention of buying back $1 billion of common stock in 2023.
Weyerhaeuser Company (WY - Free Report) reported fourth-quarter 2022 results. Although its earnings beat the Zacks Consensus Estimate, the same declined from the year-ago period's levels.
The quarter’s performance reflects strong execution across the businesses, which was offset by macroeconomic headwinds, supply chain disruptions and dynamic market conditions.
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PulteGroup (PHM) Q4 Earnings & Revenues Beat, Margins Rise
PulteGroup Inc. (PHM - Free Report) reported impressive fourth-quarter 2022 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
Shares of this notable homebuilder jumped 8.48% in the pre-market trading session on Jan 31.
Pertaining to the result, Ryan Marshall, PulteGroup’s president and CEO, stated, “Our strong fourth quarter results allowed PulteGroup to lower its debt-to-capital ratio to 18.7% and deliver a full year return on equity of 32.9%.”
Inside the Headlines
Adjusted earnings per share came in at $3.63, which topped the consensus mark of $2.88 by 26% and increased 45% from $2.51 per share a year ago. The upside was driven by gains in revenues, improved gross margins and overhead leverage.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Total revenues of $5.17 billion also beat the consensus mark of $4.6 billion by 12.3% and increased 13.4% from the year-ago figure of $4.36 billion.
Segment Discussion
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Revenues from the Homebuilding segment were up 19.8% year over year to $5.1 billion. Home sale revenues of $5.05 billion increased 19.7% year over year, mainly due to the higher average price of homes closed. Land sale revenues also rose 22.3% from a year ago to $45.5 million.
The number of homes closed increased 3% from the year-ago level to 8,848 units. The average selling price of homes delivered was $571,000, up 17% year over year.
Most importantly, its backlog, which represents orders yet to be closed, was 12,169 units, down 32.4% year over year. In addition, potential housing revenues from backlog decreased 22.2% from the prior-year quarter to $7.67 billion.
New home orders dropped 41% year over year to 3,964 units for the quarter, owing to several headwinds like rising mortgage rates, lower affordability, lower consumer confidence and slowed demand. This resulted in a cancellation rate of 32%, up from 11% in the prior year period and 24% in the third quarter of 2022. Home orders were down across all operating regions served. The value of new orders also declined 43.1% from a year ago to $2.15 billion.
Home sales gross margin was up 200 bps year over year to 28.8% for the reported quarter. Adjusted SG&A expenses (as a percentage of home sales revenues) improved 50 bps to 8.2% from 8.7% a year ago. Adjusted operating margin increased by 250 bps year over year to 20.6%.
Revenues from the Financial Services segment declined 28.6% year over year to $72.1 million. Pretax income for the segment decreased to $24 million from $55 million a year ago. The decline was due to a reduction in loan volumes owing to a fall in capture rate to 75% compared with 85% last year and the more competitive pricing environment.
Financials
At the end of 2022, cash, cash equivalents and restricted cash were $1.09 billion, down from $1.83 billion in 2021-end. Net debt-to-capital was 9.6% at 2022-end, significantly up from 2.5% at 2021-end.
Net cash provided by operating activities was $668.5 million in 2022 versus $1,004 million in 2021.
In fourth-quarter 2022, the company repurchased 2.4 million common shares for $100 million at an average price of $41.81 per share. For 2022, PHM repurchased 24.2 million common shares for $1.1 billion at an average price of $44.48 per share.
Zacks Rank & Recent Construction Releases
PulteGroup currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton, Inc. (DHI - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate.
Yet, on a year-over-year basis, the metrics declined due to prevailing softness in the market.
United Rentals, Inc. (URI - Free Report) reported fourth-quarter 2022 results. Its earnings and revenues missed the Zacks Consensus Estimate but increased on a year-over-year basis on the back of sustained demand in its end markets and the strength of its core rental business.
URI provided solid full-year 2023 guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 1.5%. The company also plans to restart its share repurchase program, with the intention of buying back $1 billion of common stock in 2023.
Weyerhaeuser Company (WY - Free Report) reported fourth-quarter 2022 results. Although its earnings beat the Zacks Consensus Estimate, the same declined from the year-ago period's levels.