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PulteGroup (PHM) to Report Q3 Earnings: What's in the Cards?
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PulteGroup Inc. (PHM - Free Report) is slated to report third-quarter 2019 results on Oct 22, before the opening bell.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 4.9% and 0.5%, respectively. Notably, it surpassed earnings estimates in each of the trailing 11 quarters.
This homebuilder’s second-quarter earnings and revenues decreased 3.4% each from the year-ago reported figure.
How are Estimates Faring?
Let’s take a look at the estimate revision trend in order to get a clear picture of what analysts are thinking about the company prior to the earnings release.
The Zacks Consensus Estimate for the quarter to be reported is currently pegged at 92 cents per share, remaining unchanged over the past 30 days. This indicates a decrease of 8.9% from the year-ago reported figure of $1.01 per share. Revenues are expected to be $2.6 billion, suggesting 1.7% year-over-year decline.
PulteGroup’s lower revenues and earnings, mainly due to the ongoing U.S. housing market uncertainties, are expected to get reflected in third-quarter 2019 results. Although declining mortgage rates and lower housing prices are expected to have increased traffic in the quarter, lower conversion of that traffic to sign purchase contracts is likely to have weighed on its revenues.
For the to-be-reported quarter, the company expects deliveries within 5,700-6,000 homes, indicating a decline from 6,031 reported in the year-ago period. Average selling price or ASP is projected between $425,000 and $430,000. The metric was $427,000 a year ago.
Overall, the consensus estimate for Homebuilding revenues (accounting for 98% of revenues) of $2.55 billion suggests a 1.9% year-over-year decrease. However, it is expected to register 4.7% higher revenues sequentially.
Meanwhile, higher construction material prices, and rising land and labor costs are expected to have weighed on its margins. PulteGroup expects homebuilding gross margin in the third quarter within 22.8-23.3%. The metric was 24% in the year-ago period and 23.1% in second-quarter 2019.
In a nutshell, lower revenues and margins are expected to have affected the company’s third-quarter earnings.
What the Zacks Model Says
Our proven model does not show that PulteGroup is likely to beat estimates in the quarter to be reported. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.
Earnings ESP: PulteGroup has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 92 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Meritage Corporation (MTH - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank #1.
Jacobs Engineering Group Inc. has an Earnings ESP of +1.14% and holds a Zacks Rank #2.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +4.10% and carries a Zacks Rank #2.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.50% per year. So be sure to give these hand-picked 7 your immediate attention.
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PulteGroup (PHM) to Report Q3 Earnings: What's in the Cards?
PulteGroup Inc. (PHM - Free Report) is slated to report third-quarter 2019 results on Oct 22, before the opening bell.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 4.9% and 0.5%, respectively. Notably, it surpassed earnings estimates in each of the trailing 11 quarters.
This homebuilder’s second-quarter earnings and revenues decreased 3.4% each from the year-ago reported figure.
How are Estimates Faring?
Let’s take a look at the estimate revision trend in order to get a clear picture of what analysts are thinking about the company prior to the earnings release.
The Zacks Consensus Estimate for the quarter to be reported is currently pegged at 92 cents per share, remaining unchanged over the past 30 days. This indicates a decrease of 8.9% from the year-ago reported figure of $1.01 per share. Revenues are expected to be $2.6 billion, suggesting 1.7% year-over-year decline.
PulteGroup, Inc. Price and EPS Surprise
PulteGroup, Inc. price-eps-surprise | PulteGroup, Inc. Quote
Factors to Consider
PulteGroup’s lower revenues and earnings, mainly due to the ongoing U.S. housing market uncertainties, are expected to get reflected in third-quarter 2019 results. Although declining mortgage rates and lower housing prices are expected to have increased traffic in the quarter, lower conversion of that traffic to sign purchase contracts is likely to have weighed on its revenues.
For the to-be-reported quarter, the company expects deliveries within 5,700-6,000 homes, indicating a decline from 6,031 reported in the year-ago period. Average selling price or ASP is projected between $425,000 and $430,000. The metric was $427,000 a year ago.
Overall, the consensus estimate for Homebuilding revenues (accounting for 98% of revenues) of $2.55 billion suggests a 1.9% year-over-year decrease. However, it is expected to register 4.7% higher revenues sequentially.
Meanwhile, higher construction material prices, and rising land and labor costs are expected to have weighed on its margins. PulteGroup expects homebuilding gross margin in the third quarter within 22.8-23.3%. The metric was 24% in the year-ago period and 23.1% in second-quarter 2019.
In a nutshell, lower revenues and margins are expected to have affected the company’s third-quarter earnings.
What the Zacks Model Says
Our proven model does not show that PulteGroup is likely to beat estimates in the quarter to be reported. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.
Earnings ESP: PulteGroup has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 92 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PulteGroup carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Worth a Look
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Meritage Corporation (MTH - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank #1.
Jacobs Engineering Group Inc. has an Earnings ESP of +1.14% and holds a Zacks Rank #2.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +4.10% and carries a Zacks Rank #2.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.50% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>