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PulteGroup Stock Gains After Q2 Earnings and Revenue Beat
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Key Takeaways
PHM posted Q2 EPS of $3.03 and revenues of $4.4B, both surpassing the Zacks Consensus Estimate.
Home closings dropped 5.7% and net new orders fell 7.4% year over year in the second quarter.
CEO highlights market challenges but sees opportunity amid improved consumer sentiment on rate dips.
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected second-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate.
CEO Ryan Marshall noted that while the spring selling season was impacted by high mortgage rates, affordability challenges, and economic uncertainty, consumer sentiment improved during periods of rate declines. The company is adjusting home production and land investments to current market conditions while preparing to capitalize on future demand growth.
Shares of this notable homebuilder gained 1.4% on Tuesday, following the earnings release.
Inside PulteGroup’s Headlines
The company reported adjusted earnings of $3.03 per share, which topped the Zacks Consensus Estimate of $2.92 by 3.8%. In the year-ago quarter, PulteGroup reported adjusted earnings per share of $3.58.
Total revenues of $4.4 billion also surpassed the consensus mark of $4.37 billion by 0.8% but decreased 4.3% from the year-ago figure of $4.6 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Homebuilding: Revenues from this segment were down 4.1% year over year to $4.3 billion. We had expected Homebuilding revenues to decrease 4.3% year over year to $4.29 billion.
Home sale revenues decreased 4.1% year over year to $4.27 billion. Land sale and other revenues decreased 13.1% to $34.6 million from a year ago.
The number of homes closed dropped 5.7% to 7639 units (versus our projection of 7,561 units) from the year-ago level. The ASP of homes delivered was $559,000, up 1.8% year over year. We had predicted ASP of homes delivered to be $562,200.
Net new home orders declined 7.4% year over year to 7,083 units (versus our expectation of 7,811 units). Yet, the value of new orders declined 10.8% from a year ago to $3.89 billion.
PHM’s backlog, which represents orders yet to be closed, was 10,779 units, down from 12,982 units a year ago. In addition, potential housing revenues from the backlog were down year over year to $6.84 billion from $8.11 billion.
Home sales gross margin was down 290 basis points (bps) year over year to 27%. SG&A expenses (as a percentage of home sales revenues) expanded 100 bps to 9.1% from a year ago.
Financial Services: Revenues from this segment dropped 9.4% year over year to $101.2 million. Pretax income for the segment declined to $43 million from $63 million a year ago, due to lower closing volumes in the company’s homebuilding operations.
Sneak Peek at PulteGroup’s Financials
At the end of the second quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.27 billion, down from $1.65 billion at the end of 2024. Net debt-to-capital was 2.8% at the second-quarter end against (0.3)% in 2024-end.
Net cash provided by operating activities was $421.7 million in the second quarter, down from $657.3 million in the prior-year period.
In the quarter, the company repurchased 3 million common shares for $300 million at an average price of $100.54 per share.
D.R. Horton, Inc. (DHI - Free Report) delivered third-quarter fiscal 2025 results (ended June 30, 2025) that surpassed Zacks Consensus Estimate for both earnings and total revenues, though both metrics declined year over year.
D.R. Horton has updated its full-year outlook, now projecting consolidated revenues between $33.7 billion and $34.2 billion, slightly narrowing its prior guidance of $33.3 billion to $34.8 billion. This revised range is below the $36.8 billion reported in fiscal 2024. D.R. Horton also expects to close between 85,000 and 85,500 homes in fiscal 2025, down from its earlier estimate of 85,000 to 87,000 and lower than the 89,690 homes closed in the prior fiscal year.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results last month. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis, reflecting ongoing weakness in the housing market. Persistently high mortgage rates continue to weigh on affordability, dampening buyer activity.
In response to market uncertainty and a reduced level of net orders at quarter-end, KB Home revised its fiscal 2025 outlook downward. KB Home now projects housing revenues between $6.30 billion and $6.50 billion, down from its previous guidance of $6.6 billion to $7 billion.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate while total revenues topped the same. On the contrary, year over year, both metrics tumbled, reflecting the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering ASP adversely impacted the revenue growth during the quarter.
For the third quarter of fiscal 2025, Lennar expects deliveries to be in the range of 22,000-23,000 homes, depicting growth from 21,516 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $380,000-$385,000 compared with $422,000 reported a year ago. The gross margin on home sales is expected to be about 18%, down from 22.5% reported a year ago.
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PulteGroup Stock Gains After Q2 Earnings and Revenue Beat
Key Takeaways
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected second-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate.
CEO Ryan Marshall noted that while the spring selling season was impacted by high mortgage rates, affordability challenges, and economic uncertainty, consumer sentiment improved during periods of rate declines. The company is adjusting home production and land investments to current market conditions while preparing to capitalize on future demand growth.
Shares of this notable homebuilder gained 1.4% on Tuesday, following the earnings release.
Inside PulteGroup’s Headlines
The company reported adjusted earnings of $3.03 per share, which topped the Zacks Consensus Estimate of $2.92 by 3.8%. In the year-ago quarter, PulteGroup reported adjusted earnings per share of $3.58.
Total revenues of $4.4 billion also surpassed the consensus mark of $4.37 billion by 0.8% but decreased 4.3% from the year-ago figure of $4.6 billion.
PulteGroup, Inc. Price, Consensus and EPS Surprise
PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote
Segmental Discussion of PulteGroup
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Homebuilding: Revenues from this segment were down 4.1% year over year to $4.3 billion. We had expected Homebuilding revenues to decrease 4.3% year over year to $4.29 billion.
Home sale revenues decreased 4.1% year over year to $4.27 billion. Land sale and other revenues decreased 13.1% to $34.6 million from a year ago.
The number of homes closed dropped 5.7% to 7639 units (versus our projection of 7,561 units) from the year-ago level. The ASP of homes delivered was $559,000, up 1.8% year over year. We had predicted ASP of homes delivered to be $562,200.
Net new home orders declined 7.4% year over year to 7,083 units (versus our expectation of 7,811 units). Yet, the value of new orders declined 10.8% from a year ago to $3.89 billion.
PHM’s backlog, which represents orders yet to be closed, was 10,779 units, down from 12,982 units a year ago. In addition, potential housing revenues from the backlog were down year over year to $6.84 billion from $8.11 billion.
Home sales gross margin was down 290 basis points (bps) year over year to 27%. SG&A expenses (as a percentage of home sales revenues) expanded 100 bps to 9.1% from a year ago.
Financial Services: Revenues from this segment dropped 9.4% year over year to $101.2 million. Pretax income for the segment declined to $43 million from $63 million a year ago, due to lower closing volumes in the company’s homebuilding operations.
Sneak Peek at PulteGroup’s Financials
At the end of the second quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.27 billion, down from $1.65 billion at the end of 2024. Net debt-to-capital was 2.8% at the second-quarter end against (0.3)% in 2024-end.
Net cash provided by operating activities was $421.7 million in the second quarter, down from $657.3 million in the prior-year period.
In the quarter, the company repurchased 3 million common shares for $300 million at an average price of $100.54 per share.
PHM’s 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) delivered third-quarter fiscal 2025 results (ended June 30, 2025) that surpassed Zacks Consensus Estimate for both earnings and total revenues, though both metrics declined year over year.
D.R. Horton has updated its full-year outlook, now projecting consolidated revenues between $33.7 billion and $34.2 billion, slightly narrowing its prior guidance of $33.3 billion to $34.8 billion. This revised range is below the $36.8 billion reported in fiscal 2024. D.R. Horton also expects to close between 85,000 and 85,500 homes in fiscal 2025, down from its earlier estimate of 85,000 to 87,000 and lower than the 89,690 homes closed in the prior fiscal year.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results last month. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis, reflecting ongoing weakness in the housing market. Persistently high mortgage rates continue to weigh on affordability, dampening buyer activity.
In response to market uncertainty and a reduced level of net orders at quarter-end, KB Home revised its fiscal 2025 outlook downward. KB Home now projects housing revenues between $6.30 billion and $6.50 billion, down from its previous guidance of $6.6 billion to $7 billion.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate while total revenues topped the same. On the contrary, year over year, both metrics tumbled, reflecting the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering ASP adversely impacted the revenue growth during the quarter.
For the third quarter of fiscal 2025, Lennar expects deliveries to be in the range of 22,000-23,000 homes, depicting growth from 21,516 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $380,000-$385,000 compared with $422,000 reported a year ago. The gross margin on home sales is expected to be about 18%, down from 22.5% reported a year ago.