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PulteGroup's Q3 Earnings & Revenues Beat Estimates, Stock Up
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PulteGroup Inc. (PHM - Free Report) reported impressive results in the third quarter of 2024, wherein earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year.
The quarter’s result reflects the successful execution of the company’s balanced spec and build-to-order operating model. This, alongside the structural shortage of homes from years of underbuilding, continued to favor the company. Thanks to such tailwinds, the home closings during the quarter grew year over year resulting in record third-quarter home sale revenues.
Furthermore, PHM invested about $1.4 billion into its business during the quarter, while returning more than $360 million to its shareholders and generating a return on equity of 27% over the past 12 months.
The Fed’s turn on lowering interest rates in the latter half of September has sparked momentum in the homebuilding industry as this tool is expected to address the affordability challenges faced by homebuyers. PulteGroup is optimistic about the upcoming market trends and expects to deliver strong earnings in 2024.
Shares of this notable homebuilder gained 1.2% during the pre-market trading session on Tuesday, following the earnings release.
Inside PHM’s Headlines
PHM reported earnings of $3.35 per share, which topped the Zacks Consensus Estimate of $3.10 by 8.1% and increased 16% from $2.90 reported a year ago.
PulteGroup, Inc. Price, Consensus and EPS Surprise
Total revenues of $4.48 billion also surpassed the consensus mark of $4.26 billion by 5.1% and increased 12% from the year-ago figure of $4 billion.
Segmental Discussion of PulteGroup
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Homebuilding: Revenues from this segment were up 12% year over year to $4.3 billion. The increase in home sale revenues was primarily driven by growth in the number of homes closed. Land sale and other revenues declined to $19.3 million from $39.9 million a year ago.
The number of homes closed increased 12% to 7,924 units from the year-ago level. The average selling price of homes delivered was $548,000, almost flat year over year.
Net new home orders marginally declined 0.5% year over year to 7,031 units. Yet, the value of new orders rose 2.9% from a year ago to $3.93 billion.
PHM’s backlog, which represents orders yet to be closed, was 12,089 units, down 10.8% year over year. In addition, potential housing revenues from the backlog were down year over year to $7.69 billion from $8.13 billion.
Home sales gross margin was down 70 basis points (bps) year over year to 28.8%. SG&A expenses (as a percentage of home sales revenues) increased 30 bps to 9.4% from 9.1% a year ago.
Financial Services: Revenues from this segment increased 48.4% year over year to $113.8 million. Pretax income for the segment increased 90% to $55 million from the year-ago figure of $29 million. The increase in pre-tax income reflects the benefit of higher volumes in PulteGroup’s homebuilding operations paired with a favorable operating environment.
PHM’s Financials
At the end of the third quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.46 billion, down from $1.85 billion at the end of 2023. Net debt-to-capital was 1.4% at the third-quarter end, up from 1.1% at 2023-end.
Net cash provided by operating activities was $1.11 billion in the first nine months of 2024 compared with $1.91 billion in the prior-year period.
In the reported quarter, the company repurchased 2.5 million common shares for $320 million at an average price of $126.05 per share.
RPM International Inc. (RPM - Free Report) reported impressive earnings in first-quarter fiscal 2025 (ended Aug. 31, 2024), which beat the Zacks Consensus Estimate by 4.6% and increased 12.2% year over year. Yet, net sales missed the consensus mark by 2.4% and declined 2.1% from the previous year.
This specialty chemicals manufacturer reported strong earnings on the back of record adjusted EBIT for the 11th consecutive quarter and reduced interest expenses. The bottom line improved on the continued implementation of MAP 2025 operational improvement initiatives and leveraging its portfolio of products, services and entrepreneurial culture to capture growth opportunities. However, unfavorable foreign exchange and volume declines at Consumer Group and SPG units marred the top line. For the second quarter, RPM expects continued growth in high-performance building construction and renovation but softness in residential end markets.
Acuity Brands, Inc. (AYI - Free Report) reported solid results in fourth-quarter fiscal 2024 (ended Aug. 31, 2024), with earnings and net sales surpassing the Zacks Consensus Estimate. Earnings beat the consensus mark for the 18th consecutive quarter.
While the Intelligent Spaces Group or ISG segment saw robust sales growth, the ABL segment witnessed tepid growth in the quarter. This mixed performance reflects the broader market dynamics where traditional lighting may face headwinds, while intelligent spaces and connected solutions continue to gain traction. The company successfully expanded its gross and operating profit margins on the back of cost-saving initiatives across segments.
KB Home (KBH - Free Report) reported mixed results for third-quarter fiscal 2024 (ended Aug. 31, 2024). Its earnings met the Zacks Consensus Estimate, while revenues beat the same. On a year-over-year basis, both metrics increased.
The company experienced variability in demand across the quarter, with softening in late June through July. The trend was diverse as buyers continued to evaluate elevated mortgage rates and general economic concerns. Nonetheless, orders stabilized on improving rates. KBH remains encouraged for its fiscal fourth quarter thanks to the recent strength in demand for its affordably priced personalized homes. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market dynamics.
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PulteGroup's Q3 Earnings & Revenues Beat Estimates, Stock Up
PulteGroup Inc. (PHM - Free Report) reported impressive results in the third quarter of 2024, wherein earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year.
The quarter’s result reflects the successful execution of the company’s balanced spec and build-to-order operating model. This, alongside the structural shortage of homes from years of underbuilding, continued to favor the company. Thanks to such tailwinds, the home closings during the quarter grew year over year resulting in record third-quarter home sale revenues.
Furthermore, PHM invested about $1.4 billion into its business during the quarter, while returning more than $360 million to its shareholders and generating a return on equity of 27% over the past 12 months.
The Fed’s turn on lowering interest rates in the latter half of September has sparked momentum in the homebuilding industry as this tool is expected to address the affordability challenges faced by homebuyers. PulteGroup is optimistic about the upcoming market trends and expects to deliver strong earnings in 2024.
Shares of this notable homebuilder gained 1.2% during the pre-market trading session on Tuesday, following the earnings release.
Inside PHM’s Headlines
PHM reported earnings of $3.35 per share, which topped the Zacks Consensus Estimate of $3.10 by 8.1% and increased 16% from $2.90 reported a year ago.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Total revenues of $4.48 billion also surpassed the consensus mark of $4.26 billion by 5.1% and increased 12% from the year-ago figure of $4 billion.
Segmental Discussion of PulteGroup
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Homebuilding: Revenues from this segment were up 12% year over year to $4.3 billion. The increase in home sale revenues was primarily driven by growth in the number of homes closed. Land sale and other revenues declined to $19.3 million from $39.9 million a year ago.
The number of homes closed increased 12% to 7,924 units from the year-ago level. The average selling price of homes delivered was $548,000, almost flat year over year.
Net new home orders marginally declined 0.5% year over year to 7,031 units. Yet, the value of new orders rose 2.9% from a year ago to $3.93 billion.
PHM’s backlog, which represents orders yet to be closed, was 12,089 units, down 10.8% year over year. In addition, potential housing revenues from the backlog were down year over year to $7.69 billion from $8.13 billion.
Home sales gross margin was down 70 basis points (bps) year over year to 28.8%. SG&A expenses (as a percentage of home sales revenues) increased 30 bps to 9.4% from 9.1% a year ago.
Financial Services: Revenues from this segment increased 48.4% year over year to $113.8 million. Pretax income for the segment increased 90% to $55 million from the year-ago figure of $29 million. The increase in pre-tax income reflects the benefit of higher volumes in PulteGroup’s homebuilding operations paired with a favorable operating environment.
PHM’s Financials
At the end of the third quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.46 billion, down from $1.85 billion at the end of 2023. Net debt-to-capital was 1.4% at the third-quarter end, up from 1.1% at 2023-end.
Net cash provided by operating activities was $1.11 billion in the first nine months of 2024 compared with $1.91 billion in the prior-year period.
In the reported quarter, the company repurchased 2.5 million common shares for $320 million at an average price of $126.05 per share.
PHM’s Zacks Rank & Recent Construction 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.
RPM International Inc. (RPM - Free Report) reported impressive earnings in first-quarter fiscal 2025 (ended Aug. 31, 2024), which beat the Zacks Consensus Estimate by 4.6% and increased 12.2% year over year. Yet, net sales missed the consensus mark by 2.4% and declined 2.1% from the previous year.
This specialty chemicals manufacturer reported strong earnings on the back of record adjusted EBIT for the 11th consecutive quarter and reduced interest expenses. The bottom line improved on the continued implementation of MAP 2025 operational improvement initiatives and leveraging its portfolio of products, services and entrepreneurial culture to capture growth opportunities. However, unfavorable foreign exchange and volume declines at Consumer Group and SPG units marred the top line. For the second quarter, RPM expects continued growth in high-performance building construction and renovation but softness in residential end markets.
Acuity Brands, Inc. (AYI - Free Report) reported solid results in fourth-quarter fiscal 2024 (ended Aug. 31, 2024), with earnings and net sales surpassing the Zacks Consensus Estimate. Earnings beat the consensus mark for the 18th consecutive quarter.
While the Intelligent Spaces Group or ISG segment saw robust sales growth, the ABL segment witnessed tepid growth in the quarter. This mixed performance reflects the broader market dynamics where traditional lighting may face headwinds, while intelligent spaces and connected solutions continue to gain traction. The company successfully expanded its gross and operating profit margins on the back of cost-saving initiatives across segments.
KB Home (KBH - Free Report) reported mixed results for third-quarter fiscal 2024 (ended Aug. 31, 2024). Its earnings met the Zacks Consensus Estimate, while revenues beat the same. On a year-over-year basis, both metrics increased.
The company experienced variability in demand across the quarter, with softening in late June through July. The trend was diverse as buyers continued to evaluate elevated mortgage rates and general economic concerns. Nonetheless, orders stabilized on improving rates. KBH remains encouraged for its fiscal fourth quarter thanks to the recent strength in demand for its affordably priced personalized homes. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market dynamics.