- Earnings Increased 32% to $3.10 Per Share
- Home Sale Revenues Increased 10% to $3.8 Billion
- Closings Increased 11% to 7,095 Homes
- Home Sale Gross Margin Increased 50 Basis Points to
29.6%
- Net New Orders Increased 14% to 8,379 Homes
- Unit Backlog of 13,430 Homes with a Value of $8.2
Billion
- Repurchased $246 Million of Common Shares in the
Quarter
- Quarter-End Cash Position of $1.8 Billion
PulteGroup, Inc. (NYSE: PHM) announced today financial results
for its first quarter ended March 31, 2024. For the quarter, the
Company reported net income of $663 million, or $3.10 per share.
Reported net income for the quarter includes a $38 million pre-tax,
or $0.14 per share, gain related to the sale of a joint venture,
and a $27 million pre-tax, or $0.09 per share, insurance benefit
recorded in the period. In 2023, the Company reported net income of
$532 million, or $2.35 per share.
“PulteGroup reported outstanding financial results that included
first quarter records for home sale revenues of $3.8 billion, gross
margins of 29.6% and earnings per share of $3.10, all of which
helped to drive a return on equity* of 27.3%,” said PulteGroup
President and CEO Ryan Marshall. “Our strong financial performance
reflects both favorable demand conditions and our balanced
operating model that allows us to more effectively meet the
individual needs of first-time, move-up and active-adult
consumers.
“After more than a decade of underbuilding, it is estimated that
our country has a structural shortage of several million homes,”
added Marshall. “Given PulteGroup’s broad operating platform and
deep product portfolio, along with the powerful incentive programs
we can offer to help improve the overall affordability equation, we
are well positioned to expand our market share while helping to
provide much needed new housing stock.”
First Quarter Financial Results
First quarter home sale revenues for the Company increased 10%
over the prior year to $3.8 billion. Higher revenues in the quarter
reflect an 11% increase in closings to 7,095 homes, partially
offset by a 1% decrease in average sales price to $538,000.
The Company’s home sale gross margin in the first quarter was
29.6%, which is an increase of 50 basis points over the first
quarter of last year and a sequential gain of 70 basis points over
the fourth quarter of 2023. First quarter gross margins benefited
from ongoing strength in homebuyer demand and a favorable
geographic mix of homes closed in the period.
Reported SG&A expense in the quarter of $358 million, or
9.4% of home sale revenues, includes the $27 million pre-tax
insurance benefit recorded in the period. Prior year SG&A
expense was $337 million, or 9.6% of home sale revenues.
In the first quarter, the Company reported equity income from
unconsolidated entities of $38 million, which includes the gain
from the joint venture sale completed in the period. Pre-tax income
for the quarter increased 24% over the prior year to $868
million.
Net new orders for the first quarter increased 14% over last
year to 8,379 homes. The increase in net new orders for the period
reflects both higher gross orders and a lower cancelation rate
which fell to 10% of beginning period backlog, which is down from
13% in the first quarter of last year. In the quarter, the Company
operated from an average of 931 communities, an increase of 6% over
the prior year’s 879 communities.
The Company’s quarter end backlog was 13,430 homes valued at
$8.2 billion.
In the first quarter, PulteGroup’s financial services operations
reported pre-tax income of $41 million, up from pre-tax income of
$14 million in the prior year period. Pre-tax income in the quarter
benefited from higher closing volumes in the Company’s homebuilding
operations, coupled with a more favorable operating environment.
Financial services also benefited from higher capture across all
business lines, including a capture rate of 84% in its mortgage
operations, up from 78% in the prior year.
The Company repurchased 2.3 million of its common shares
outstanding for $246 million, or an average price of $106.73 per
share. The Company ended the quarter with a debt-to-capital ratio
of 15.4%. Adjusting for the $1.8 billion of cash on its balance
sheet at quarter end, the Company’s net debt-to-capital ratio was
1.7%.
A conference call to discuss PulteGroup's first quarter results
is scheduled for Tuesday April 23, 2024, at 8:30 a.m. Eastern Time.
Interested investors can access the live webcast via PulteGroup's
corporate website at www.pultegroup.com.
* The Company's return on equity is calculated as net income for
the trailing twelve months divided by average shareholders' equity,
where average shareholders' equity is the sum of ending
shareholders' equity balances of the trailing five quarters divided
by five.
Forward-Looking Statements
This release includes “forward-looking statements.” These
statements are subject to a number of risks, uncertainties and
other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “plan,” “project,” “may,” “can,” “could,”
“might,” “should,” “will” and similar expressions identify
forward-looking statements, including statements related to any
potential impairment charges and the impacts or effects thereof,
expected operating and performing results, planned transactions,
planned objectives of management, future developments or conditions
in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future.
Such risks, uncertainties and other factors include, among other
things: interest rate changes and the availability of mortgage
financing; the impact of any changes to our strategy in responding
to the cyclical nature of the industry or deteriorations in
industry changes or downward changes in general economic or other
business conditions, including any changes regarding our land
positions and the levels of our land spend; economic changes
nationally or in our local markets, including inflation, deflation,
changes in consumer confidence and preferences and the state of the
market for homes in general; labor supply shortages and the cost of
labor; the availability and cost of land and other raw materials
used by us in our homebuilding operations; a decline in the value
of the land and home inventories we maintain and resulting possible
future writedowns of the carrying value of our real estate assets;
competition within the industries in which we operate; governmental
regulation directed at or affecting the housing market, the
homebuilding industry or construction activities, slow growth
initiatives and/or local building moratoria; the availability and
cost of insurance covering risks associated with our businesses,
including warranty and other legal or regulatory proceedings or
claims; damage from improper acts of persons over whom we do not
have control or attempts to impose liabilities or obligations of
third parties on us; weather related slowdowns; the impact of
climate change and related governmental regulation; adverse capital
and credit market conditions, which may affect our access to and
cost of capital; the insufficiency of our income tax provisions and
tax reserves, including as a result of changing laws or
interpretations; the potential that we do not realize our deferred
tax assets; our inability to sell mortgages into the secondary
market; uncertainty in the mortgage lending industry, including
revisions to underwriting standards and repurchase requirements
associated with the sale of mortgage loans, and related claims
against us; risks related to information technology failures, data
security issues, and the effect of cybersecurity incidents and
threats; the impact of negative publicity on sales; failure to
retain key personnel; the impairment of our intangible assets; the
disruptions associated with the COVID-19 pandemic (or another
epidemic or pandemic or similar public threat or fear of such an
event), and the measures taken to address it; and other factors of
national, regional and global scale, including those of a
political, economic, business and competitive nature. See Item 1A –
Risk Factors in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023 for a further discussion of these and other
risks and uncertainties applicable to our businesses. We undertake
no duty to update any forward-looking statement, whether as a
result of new information, future events or changes in our
expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one
of America’s largest homebuilding companies with operations in more
than 45 markets throughout the country. Through its brand portfolio
that includes Centex, Pulte Homes, Del Webb, DiVosta Homes,
American West and John Wieland Homes and Neighborhoods, the company
is one of the industry’s most versatile homebuilders able to meet
the needs of multiple buyer groups and respond to changing consumer
demand. PulteGroup’s purpose is building incredible places where
people can live their dreams.
For more information about PulteGroup, Inc. and PulteGroup
brands, go to pultegroup.com; pulte.com; centex.com; delwebb.com;
divosta.com; jwhomes.com; and americanwesthomes.com. Follow
PulteGroup, Inc. on Twitter: @PulteGroupNews.
PulteGroup, Inc.
Consolidated Statements of
Operations
($000's omitted, except per
share data)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Revenues:
Homebuilding
Home sale revenues
$
3,819,586
$
3,487,637
Land sale and other revenues
37,217
30,066
3,856,803
3,517,703
Financial Services
92,357
57,938
Total revenues
3,949,160
3,575,641
Homebuilding Cost of
Revenues:
Home sale cost of revenues
(2,689,087
)
(2,472,329
)
Land sale and other cost of
revenues
(37,043
)
(24,967
)
(2,726,130
)
(2,497,296
)
Financial Services expenses
(51,378
)
(44,036
)
Selling, general, and
administrative expenses
(357,594
)
(336,518
)
Equity income from unconsolidated
entities, net
37,902
2,513
Other income, net
16,683
1,818
Income before income taxes
868,643
702,122
Income tax expense
(205,667
)
(169,863
)
Net income
$
662,976
$
532,259
Per share:
Basic earnings
$
3.13
$
2.35
Diluted earnings
$
3.10
$
2.35
Cash dividends declared
$
0.20
$
0.16
Number of shares used in
calculation:
Basic
211,837
225,127
Effect of dilutive securities
1,709
830
Diluted
213,546
225,957
PulteGroup, Inc.
Condensed Consolidated Balance
Sheets
($000's omitted)
(Unaudited)
March 31, 2024
December 31,
2023
ASSETS
Cash and equivalents
$
1,719,562
$
1,806,583
Restricted cash
46,527
42,594
Total cash, cash equivalents, and
restricted cash
1,766,089
1,849,177
House and land inventory
12,107,212
11,795,370
Land held for sale
24,838
23,831
Residential mortgage loans
available-for-sale
570,839
516,064
Investments in unconsolidated entities
204,117
166,913
Other assets
1,638,458
1,545,667
Goodwill
68,930
68,930
Other intangible assets
53,798
56,338
Deferred tax assets
61,949
64,760
$
16,496,230
$
16,087,050
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities:
Accounts payable
$
575,071
$
619,012
Customer deposits
698,775
675,091
Deferred tax liabilities
336,780
302,155
Accrued and other liabilities
1,632,462
1,645,690
Financial Services debt
534,335
499,627
Notes payable
1,956,854
1,962,218
5,734,277
5,703,793
Shareholders' equity
10,761,953
10,383,257
$
16,496,230
$
16,087,050
PulteGroup, Inc.
Consolidated Statements of
Cash Flows
($000's omitted)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating
activities:
Net income
$
662,976
$
532,259
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income tax expense
37,428
28,152
Land-related charges
4,018
5,683
Depreciation and amortization
21,061
19,139
Equity income from unconsolidated
entities
(37,902
)
(2,513
)
Distributions of income from
unconsolidated entities
1,256
3,509
Share-based compensation expense
16,585
12,488
Other, net
(413
)
50
Increase (decrease) in cash due to:
Inventories
(289,247
)
(85,408
)
Residential mortgage loans
available-for-sale
(54,774
)
256,360
Other assets
(108,132
)
25,053
Accounts payable, accrued and other
liabilities
(13,069
)
(83,404
)
Net cash provided by operating
activities
239,787
711,368
Cash flows from investing
activities:
Capital expenditures
(24,076
)
(23,743
)
Investments in unconsolidated entities
(3,955
)
(1,117
)
Distributions of capital from
unconsolidated entities
3,398
2,216
Other investing activities, net
(2,256
)
(1,570
)
Net cash used in investing activities
(26,889
)
(24,214
)
Cash flows from financing
activities:
Repayments of notes payable
(11,140
)
(4,500
)
Financial Services borrowings
(repayments), net
34,708
(262,264
)
Proceeds from liabilities related to
consolidated inventory not owned
19,077
18,449
Payments related to consolidated inventory
not owned
(32,511
)
(10,099
)
Share repurchases
(245,844
)
(150,000
)
Cash paid for shares withheld for
taxes
(17,592
)
(10,059
)
Dividends paid
(42,684
)
(36,380
)
Net cash used in financing activities
(295,986
)
(454,853
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(83,088
)
232,301
Cash, cash equivalents, and restricted
cash at beginning of period
1,849,177
1,094,553
Cash, cash equivalents, and restricted
cash at end of period
$
1,766,089
$
1,326,854
Supplemental Cash Flow
Information:
Interest paid (capitalized), net
$
7,251
$
6,205
Income taxes paid (refunded), net
$
1,015
$
209
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended
March 31,
2024
2023
HOMEBUILDING:
Home sale revenues
$
3,819,586
$
3,487,637
Land sale and other revenues
37,217
30,066
Total Homebuilding revenues
3,856,803
3,517,703
Home sale cost of revenues
(2,689,087
)
(2,472,329
)
Land sale and other cost of revenues
(37,043
)
(24,967
)
Selling, general, and administrative
expenses
(357,594
)
(336,518
)
Equity income from unconsolidated
entities
37,902
2,513
Other income, net
16,683
1,818
Income before income taxes
$
827,664
$
688,220
FINANCIAL SERVICES:
Income before income taxes
$
40,979
$
13,902
CONSOLIDATED:
Income before income taxes
$
868,643
$
702,122
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Home sale revenues
$
3,819,586
$
3,487,637
Closings - units
Northeast
285
337
Southeast
1,445
1,168
Florida
1,917
1,752
Midwest
990
757
Texas
1,328
1,308
West
1,130
1,072
7,095
6,394
Average selling price
$
538
$
545
Net new orders - units
Northeast
441
385
Southeast
1,394
1,347
Florida
1,972
1,878
Midwest
1,274
1,083
Texas
1,454
1,424
West
1,844
1,237
8,379
7,354
Net new orders - dollars
$
4,698,659
$
3,789,993
Unit backlog
Northeast
723
522
Southeast
2,195
2,085
Florida
3,847
4,767
Midwest
1,976
1,676
Texas
1,763
1,905
West
2,926
2,174
13,430
13,129
Dollars in backlog
$
8,198,788
$
7,976,424
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
March 31,
2024
2023
MORTGAGE ORIGINATIONS:
Origination volume
4,332
3,869
Origination principal
$
1,755,046
$
1,516,450
Capture rate
84.2
%
78.3
%
Supplemental Data
($000's omitted)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Interest in inventory, beginning of
period
$
139,078
$
137,262
Interest capitalized
30,620
31,802
Interest expensed
(21,597
)
(27,793
)
Interest in inventory, end of period
$
148,101
$
141,271
PulteGroup, Inc. Reconciliation of
Non-GAAP Financial Measures
This report contains information about our debt-to-capital
ratios. These measures could be considered non-GAAP financial
measures under the SEC's rules and should be considered in addition
to, rather than as a substitute for, comparable GAAP financial
measures. We calculate total net debt by subtracting total cash,
cash equivalents, and restricted cash from notes payable to present
the amount of assets needed to satisfy the debt. We use the
debt-to-capital and net debt-to-capital ratios as indicators of our
overall leverage and believe they are useful financial measures in
understanding the leverage employed in our operations. We believe
that these measures provide investors relevant and useful
information for evaluating the comparability of financial
information presented and comparing our profitability and liquidity
to other companies in the homebuilding industry. Although other
companies in the homebuilding industry report similar information,
the methods used may differ. We urge investors to understand the
methods used by other companies in the homebuilding industry to
calculate these measures and any adjustments thereto before
comparing our measures to those of such other companies.
The following table sets forth a reconciliation of the
debt-to-capital ratios ($000's omitted):
Debt-to-Capital Ratios
March 31, 2024
December 31,
2023
Notes payable
$
1,956,854
$
1,962,218
Shareholders' equity
10,761,953
10,383,257
Total capital
$
12,718,807
$
12,345,475
Debt-to-capital ratio
15.4
%
15.9
%
Notes payable
$
1,956,854
$
1,962,218
Less: Total cash, cash equivalents, and
restricted cash
(1,766,089
)
(1,849,177
)
Total net debt
$
190,765
$
113,041
Shareholders' equity
10,761,953
10,383,257
Total net capital
$
10,952,718
$
10,496,298
Net debt-to-capital ratio
1.7
%
1.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423249858/en/
Investors: Jim Zeumer (404) 978-6434
jim.zeumer@pultegroup.com
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