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PulteGroup (PHM) Beats on Q1 Earnings & Revenues, Stock Up

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PulteGroup Inc.’s (PHM - Free Report) reported impressive first-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

The company’s earnings per share came in at 59 cents, beating the consensus mark of 44 cents. The bottom line also improved 111% on a year-over-year basis. Results benefited from higher demand, courtesy of positive U.S. housing market dynamics backed by an improving economy and job market.

Total revenues of $1.97 billion surpassed the consensus mark of $1.84 billion and also increased 21% on a year-over-year basis.

Following the results, shares of the company were up nearly 2% during the pre-market trading session. In the past year, the stock has rallied 36.2% compared with industry’s gain of 19.4%.



PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.

Revenues at the Homebuilding segment were up 21.1% year over year to $1.92 billion.

Home sale revenues of $1.911 billion rose 20.6% year over year on increased home closings and average selling price. Land sale revenues totaled $12.6 million compared with $2.7 million a year ago.

The number of homes closed increased 9% year over year to 4,626 homes. Notably, home closings were up across all operating regions of the company — Florida, Northeast, Southeast, Midwest and West — barring Texas. Average selling price (ASP) of homes delivered was $413,000, reflecting an increase of 10.1% year over year.

The company’s backlog, which represents orders yet to be closed, was 11,245, up 20.6% year over year. Potential housing revenues from backlog increased 30.5% to $5 billion, scaling a decade high. Backlog value was driven by an 8% increase in ASP of backlogs.

New home orders rose 12% year over year to 6,875 in the quarter. Home orders were up across all operating regions, baring Midwest. Value of new orders increased 18% year over year to $2.9 billion.

Margins

Home sales’ gross margin contracted 40 basis points (bps) year over year to 23.6%.

SG&A expenses, as percentage of home sale revenues, were 12.6%, down 230 bps from the prior-year quarter.

Revenues from the Financial Services segment increased 10% year over year to $45.9 million. The segment generated pre-tax income of $14 million, flat year over year. Mortgage capture rate in the quarter was 78% compared with 80% in the year-ago quarter.

PulteGroup, Inc. Price, Consensus and EPS Surprise

PulteGroup, Inc. Price, Consensus and EPS Surprise | PulteGroup, Inc. Quote

Financials

As of Mar 31, 2018, cash and cash equivalents were $150.8 million, down from $272.7 million at the end of 2017.

In the reported quarter, PulteGroup repurchased 1.7 million common shares for $52 million, or an average price of $30.86 per share.

PulteGroup has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Owens Corning (OC - Free Report) is slated to report quarterly results on Apr 25. The Zacks Consensus Estimate for earnings is pegged at 96 cents, reflecting an increase of 12.9% year over year.

Louisiana-Pacific (LPX - Free Report) is scheduled to release quarterly results on May 7. The Zacks Consensus Estimate for earnings is 67 cents, mirroring an increase of 103% year over year.

Installed Building Products (IBP - Free Report) is expected to report quarterly results on May 5. The Zacks Consensus Estimate for earnings is pegged at 46 cents, indicating a rise of 31.4% year over year.

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