- Earnings Increased 19% to $3.83 Per Share
- Home Sale Revenues Increased 10% to $4.4 Billion
- Closings Increased 8% to 8,097 Homes; Average Sales Price
Increased 2% to $549,000
- Home Sale Gross Margin Increased 30 Basis Points to
29.9%
- Net New Orders Totaled 7,649 Homes with a Value of $4.4
Billion
- Unit Backlog of 12,982 Homes with a Value of $8.1
Billion
- Repurchased $314 Million of Common Shares and $300 Million
of Senior Notes in the Quarter
PulteGroup, Inc. (NYSE: PHM) announced today financial results
for its second quarter ended June 30, 2024. For the quarter, the
Company reported net income of $809 million, or $3.83 per share.
Reported net income for the quarter includes a $52 million pre-tax,
or $0.19 per share, insurance benefit recorded in the period, and a
$13 million, or $0.06 per share, benefit related to the favorable
resolution of certain state tax matters. Prior year reported net
income of $720 million, or $3.21 per share, included a $65 million
pre-tax, or $0.21 per share, insurance benefit recorded in the
period.
“PulteGroup’s balanced operating model continues to deliver
outstanding financial results as increases in closings, average
sales price and gross margin were key drivers of the 19% increase
in our earnings to $3.83 per share,” said Ryan Marshall, President
and Chief Executive Officer of PulteGroup. “The resulting strong
cash flows are providing us with tremendous flexibility as we
continued to intelligently allocate capital in the quarter to
invest in our business growth, while returning funds to
shareholders and further strengthening our overall capital
structure.
“While interest rate movements can impact short-term homebuying
demand, long-term market dynamics continue to benefit from a
structural shortage of homes caused by years of underbuilding,”
added Mr. Marshall. “As demonstrated by our 27.1% return on equity*
for the past 12 months, we continue to successfully navigate these
conditions by actively managing sales price, pace and starts on a
community-by-community basis with the goal of realizing high
returns on invested capital and equity over time.”
Home sale revenues for the second quarter increased 10% over the
prior year to $4.4 billion. Higher revenues in the quarter were
driven by an 8% increase in closings to 8,097 homes, combined with
a 2% increase in average sales price to $549,000.
The Company reported second quarter homebuilding gross margins
of 29.9%, which is an increase of 30 basis points over both last
year and the first quarter of 2024. The Company’s reported second
quarter SG&A expense of $361 million, or 8.1% of home sale
revenues, includes the $52 million pre-tax insurance benefit
recorded in the quarter. Prior year reported SG&A expense of
$315 million, or 7.8% of home sale revenues, includes a $65 million
pre-tax insurance benefit recorded in the second quarter of
2023.
In the second quarter, the Company reported net new orders of
7,649, compared with 7,947 homes in the comparable prior year
period. The dollar value of net new orders in the second quarter
increased 2% over the prior year to $4.4 billion. The Company
operated out of an average of 934 communities in the period, which
is an increase of 3% over the second quarter of 2023.
At the end of the second quarter, the Company’s backlog was
12,982 homes with a value of $8.1 billion.
The Company's financial services operations reported second
quarter pre-tax income of $63 million, compared with prior year
pre-tax income of $46 million. The 36% increase in pre-tax income
was driven by gains across all business lines within financial
services: mortgage, title and insurance. Mortgage capture rate for
the second quarter was 86%, up from 80% last year.
The Company’s reported income tax expense for the second quarter
was $239 million, representing an effective tax rate of 22.8%. The
Company’s effective tax rate is inclusive of the $13 million
benefit related to the favorable resolution of certain state tax
matters realized in the quarter.
In the second quarter, the Company repurchased 2.8 million of
its outstanding common shares for $314 million, or an average price
of $113.79 per share. The Company also completed a tender offer in
the period for $300 million of its outstanding senior notes,
lowering its quarter-end outstanding notes payable to $1.7 billion.
Inclusive of these transactions, the Company ended the second
quarter with $1.4 billion of cash and a debt-to-capital ratio of
12.8%.
A conference call discussing PulteGroup's second quarter 2024
results is scheduled for Tuesday, July 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 X: @PulteGroupNews.
PulteGroup, Inc.
Consolidated Statements of
Operations
($000's omitted, except per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Revenues:
Homebuilding
Home sale revenues
$
4,448,168
$
4,058,930
$
8,267,754
$
7,546,567
Land sale and other revenues
39,825
37,604
77,042
67,671
4,487,993
4,096,534
8,344,796
7,614,238
Financial Services
111,662
92,219
204,019
150,156
Total revenues
4,599,655
4,188,753
8,548,815
7,764,394
Homebuilding Cost of Revenues:
Home sale cost of revenues
(3,117,482
)
(2,856,361
)
(5,806,569
)
(5,328,690
)
Land sale and other cost of revenues
(38,873
)
(32,494
)
(75,917
)
(57,461
)
(3,156,355
)
(2,888,855
)
(5,882,486
)
(5,386,151
)
Financial Services expenses
(49,334
)
(46,778
)
(100,712
)
(90,813
)
Selling, general, and administrative
expenses
(361,145
)
(314,637
)
(718,739
)
(651,156
)
Equity income from unconsolidated
entities, net
2,167
944
40,069
3,456
Other income, net
13,324
13,586
30,008
15,405
Income before income taxes
1,048,312
953,013
1,916,955
1,655,135
Income tax expense
(239,179
)
(232,668
)
(444,846
)
(402,531
)
Net income
$
809,133
$
720,345
$
1,472,109
$
1,252,604
Per share:
Basic earnings
$
3.86
$
3.23
$
6.99
$
5.58
Diluted earnings
$
3.83
$
3.21
$
6.93
$
5.55
Cash dividends declared
$
0.20
$
0.16
$
0.40
$
0.32
Number of shares used in calculation:
Basic
209,547
222,160
210,692
223,635
Effect of dilutive securities
1,654
1,232
1,682
1,031
Diluted
211,201
223,392
212,374
224,666
PulteGroup, Inc.
Condensed Consolidated Balance
Sheets
($000's omitted)
(Unaudited)
June 30, 2024
December 31,
2023
ASSETS
Cash and equivalents
$
1,392,902
$
1,806,583
Restricted cash
53,064
42,594
Total cash, cash equivalents, and
restricted cash
1,445,966
1,849,177
House and land inventory
12,302,301
11,795,370
Land held for sale
21,559
23,831
Residential mortgage loans
available-for-sale
569,387
516,064
Investments in unconsolidated entities
210,246
166,913
Other assets
1,820,092
1,545,667
Goodwill
68,930
68,930
Other intangible assets
51,300
56,338
Deferred tax assets
54,288
64,760
$
16,544,069
$
16,087,050
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities:
Accounts payable
$
651,580
$
619,012
Customer deposits
654,427
675,091
Deferred tax liabilities
381,021
302,155
Accrued and other liabilities
1,459,998
1,645,690
Financial Services debt
524,042
499,627
Notes payable
1,650,178
1,962,218
5,321,246
5,703,793
Shareholders' equity
11,222,823
10,383,257
$
16,544,069
$
16,087,050
PulteGroup, Inc.
Consolidated Statements of
Cash Flows
($000's omitted)
(Unaudited)
Six Months Ended
June 30,
2024
2023
Cash flows from operating
activities:
Net income
$
1,472,109
$
1,252,604
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income tax expense
89,321
93,389
Land-related charges
7,798
10,110
Depreciation and amortization
42,891
39,204
Equity income from unconsolidated
entities
(40,069
)
(3,456
)
Distributions of income from
unconsolidated entities
2,358
4,564
Share-based compensation expense
29,084
27,960
Other, net
120
(161
)
Increase (decrease) in cash due to:
Inventories
(473,665
)
52,001
Residential mortgage loans
available-for-sale
(55,346
)
244,516
Other assets
(294,335
)
(6,602
)
Accounts payable, accrued and other
liabilities
(123,002
)
(263,546
)
Net cash provided by operating
activities
657,264
1,450,583
Cash flows from investing
activities:
Capital expenditures
(55,317
)
(45,076
)
Investments in unconsolidated entities
(9,096
)
(7,858
)
Distributions of capital from
unconsolidated entities
3,474
2,216
Other investing activities, net
(5,262
)
(3,278
)
Net cash used in investing activities
(66,201
)
(53,996
)
Cash flows from financing
activities:
Repayments of notes payable
(318,288
)
(17,305
)
Financial Services borrowings
(repayments), net
24,416
(271,128
)
Proceeds from liabilities related to
consolidated inventory not owned
32,721
91,354
Payments related to consolidated inventory
not owned
(70,608
)
(33,577
)
Share repurchases
(559,999
)
(400,000
)
Cash paid for shares withheld for
taxes
(17,623
)
(10,389
)
Dividends paid
(84,893
)
(72,315
)
Net cash used in financing activities
(994,274
)
(713,360
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(403,211
)
683,227
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
$
1,445,966
$
1,777,780
Supplemental Cash Flow
Information:
Interest paid (capitalized), net
$
13,215
$
2,757
Income taxes paid (refunded), net
$
365,061
$
380,527
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
HOMEBUILDING:
Home sale revenues
$
4,448,168
$
4,058,930
$
8,267,754
$
7,546,567
Land sale and other revenues
39,825
37,604
77,042
67,671
Total Homebuilding revenues
4,487,993
4,096,534
8,344,796
7,614,238
Home sale cost of revenues
(3,117,482
)
(2,856,361
)
(5,806,569
)
(5,328,690
)
Land sale and other cost of revenues
(38,873
)
(32,494
)
(75,917
)
(57,461
)
Selling, general, and administrative
expenses
(361,145
)
(314,637
)
(718,739
)
(651,156
)
Equity income (loss) from unconsolidated
entities, net
1,117
(110
)
39,019
2,402
Other income, net
13,324
13,586
30,008
15,405
Income before income taxes
$
984,934
$
906,518
$
1,812,598
$
1,594,738
FINANCIAL SERVICES:
Income before income taxes
$
63,378
$
46,495
$
104,357
$
60,397
CONSOLIDATED:
Income before income taxes
$
1,048,312
$
953,013
$
1,916,955
$
1,655,135
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Home sale revenues
$
4,448,168
$
4,058,930
$
8,267,754
$
7,546,567
Closings - units
Northeast
378
315
663
652
Southeast
1,499
1,405
2,944
2,573
Florida
2,150
2,067
4,067
3,819
Midwest
1,196
918
2,186
1,675
Texas
1,472
1,511
2,800
2,819
West
1,402
1,302
2,532
2,374
8,097
7,518
15,192
13,912
Average selling price
$
549
$
540
$
544
$
542
Net new orders - units
Northeast
400
400
841
785
Southeast
1,396
1,556
2,790
2,903
Florida
1,746
1,910
3,718
3,788
Midwest
1,265
1,253
2,539
2,336
Texas
1,275
1,388
2,729
2,812
West
1,567
1,440
3,411
2,677
7,649
7,947
16,028
15,301
Net new orders - dollars
$
4,358,508
$
4,271,008
$
9,057,167
$
8,061,001
Unit backlog
Northeast
745
607
Southeast
2,092
2,236
Florida
3,443
4,610
Midwest
2,045
2,011
Texas
1,566
1,782
West
3,091
2,312
12,982
13,558
Dollars in backlog
$
8,109,128
$
8,188,502
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
MORTGAGE ORIGINATIONS:
Origination volume
5,105
4,539
9,437
8,408
Origination principal
$
2,140,103
$
1,790,977
$
3,895,150
$
3,307,427
Capture rate
86.5
%
79.7
%
85.4
%
79.1
%
Supplemental Data
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Interest in inventory, beginning of
period
$
148,101
$
141,271
$
139,078
$
137,262
Interest capitalized
29,284
31,927
59,903
63,729
Interest expensed
(28,023
)
(31,204
)
(49,619
)
(58,997
)
Interest in inventory, end of period
$
149,362
$
141,994
$
149,362
$
141,994
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
June 30, 2024
December 31,
2023
Notes payable
$
1,650,178
$
1,962,218
Shareholders' equity
11,222,823
10,383,257
Total capital
$
12,873,001
$
12,345,475
Debt-to-capital ratio
12.8
%
15.9
%
Notes payable
$
1,650,178
$
1,962,218
Less: Total cash, cash equivalents,
and
restricted cash
(1,445,966
)
(1,849,177
)
Total net debt
$
204,212
$
113,041
Shareholders' equity
11,222,823
10,383,257
Total net capital
$
11,427,035
$
10,496,298
Net debt-to-capital ratio
1.8
%
1.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723461528/en/
Investors: Jim Zeumer (404) 978-6434
jim.zeumer@pultegroup.com
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