- Earnings Increased 16% to $3.35 Per Share
- Closings Increased 12% to 7,924
- Home Sale Revenues Increased 12% to $4.3 Billion
- Home Sale Gross Margin of 28.8%
- Net New Orders Totaled 7,031 Homes with a Value of $3.9
Billion
- Unit Backlog of 12,089 Homes with a Value of $7.7
Billion
- Repurchased $320 Million of Common Shares in the
Quarter
PulteGroup, Inc. (NYSE: PHM) announced today financial results
for its third quarter ended September 30, 2024. For the quarter,
the Company reported net income of $698 million, or $3.35 per
share. In the prior year period, the Company reported net income of
$639 million, or $2.90 per share.
“Supported by the successful execution of our balanced spec and
build-to-order operating model, PulteGroup realized record third
quarter home sale revenues of $4.3 billion and earnings of $3.35
per share, as we increased home closings in the period by 12% over
last year,” said PulteGroup President and CEO, Ryan Marshall.
“Consistent with our stated strategies, in the third quarter we
invested $1.4 billion into our business, while returning over $360
million to our shareholders and generating a return on equity of
27%* for the trailing 12 months.
“Years of underbuilding has created a structural shortage of
homes and correspondingly high home prices, so the Federal
Reserve’s pivot to lowering interest rates provides a powerful tool
in helping to address the affordability challenge faced by today’s
homebuyers,” said Mr. Marshall. “Given our strong third quarter and
nine-month financial results, we are well positioned to deliver a
record year of earnings for the Company.”
Third Quarter Results
Home sale revenues in the third quarter increased 12% over the
prior year to $4.3 billion. Higher revenues in the third quarter
were driven by a 12% increase in closings to 7,924 homes. The
average selling price of homes closed in the period was $548,000,
effectively unchanged from the prior year.
The Company’s reported home sale gross margin in the third
quarter was 28.8%, compared with 29.5% in the prior year period.
Homebuilding SG&A expense for the third quarter was $407
million, or 9.4% of home sale revenues, compared with $353 million,
or 9.1% in the prior year period.
The Company’s net new orders for the third quarter were 7,031
homes, which is consistent with net new orders of 7,065 homes in
the prior year period. The value of net new orders in the quarter
was $3.9 billion, or an increase of 3% over last year. Average
community count for the third quarter was 957, which is up 4% from
the prior year.
At the end of the third quarter, the Company’s backlog was
12,089 homes with a value of $7.7 billion.
The Company's financial services operations generated pre-tax
income of $55 million, an increase of 90% over prior year pre-tax
income of $29 million. The significant increase in pre-tax income
reflects the benefit of higher volumes in the Company’s
homebuilding operations, as well as a more favorable operating
environment. Mortgage capture rate for the third quarter was 87%,
up from 84% last year.
Third quarter pre-tax income for the Company increased 7% over
the prior year period to $906 million. Income tax expense for the
third quarter was $208 million, or an effective tax rate of
23.0%.
PulteGroup repurchased 2.5 million of its common shares in the
third quarter for $320 million, or an average price of $126.05 per
share. Through the first nine months of 2024, the Company has
repurchased 7.6 million common shares, or 3.6% of shares
outstanding, for $880 million, or $115.74 per share. The Company
ended the quarter with $1.5 billion of cash and a debt-to-capital
ratio of 12.3%.
A conference call discussing PulteGroup's third quarter 2024
results is scheduled for Tuesday, October 22, 2024, at 8:30 a.m.
Eastern Time. Interested investors can access the live webcast via
PulteGroup's corporate website at www.pultegroupinc.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
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Revenues:
Homebuilding
Home sale revenues
$
4,343,227
$
3,886,908
$
12,610,981
$
11,433,476
Land sale and other revenues
19,284
39,905
96,327
107,575
4,362,511
3,926,813
12,707,308
11,541,051
Financial Services
113,831
76,720
317,848
226,875
Total revenues
4,476,342
4,003,533
13,025,156
11,767,926
Homebuilding Cost of Revenues:
Home sale cost of revenues
(3,091,267
)
(2,739,596
)
(8,897,835
)
(8,068,287
)
Land sale and other cost of revenues
(25,287
)
(35,007
)
(101,204
)
(92,467
)
(3,116,554
)
(2,774,603
)
(8,999,039
)
(8,160,754
)
Financial Services expenses
(58,905
)
(46,431
)
(159,615
)
(137,244
)
Selling, general, and administrative
expenses
(406,897
)
(353,167
)
(1,125,637
)
(1,004,323
)
Equity income from unconsolidated
entities, net
2,508
891
42,577
4,348
Other income, net
9,702
17,091
39,709
32,496
Income before income taxes
906,196
847,314
2,823,151
2,502,449
Income tax expense
(208,282
)
(208,539
)
(653,128
)
(611,070
)
Net income
$
697,914
$
638,775
$
2,170,023
$
1,891,379
Per share:
Basic earnings
$
3.38
$
2.92
$
10.36
$
8.49
Diluted earnings
$
3.35
$
2.90
$
10.28
$
8.45
Cash dividends declared
$
0.20
$
0.16
$
0.60
$
0.48
Number of shares used in calculation:
Basic
206,774
218,288
209,374
221,832
Effect of dilutive securities
1,686
1,394
1,683
1,152
Diluted
208,460
219,682
211,057
222,984
PulteGroup, Inc.
Condensed Consolidated Balance
Sheets
($000's omitted)
(Unaudited)
September 30,
2024
December 31,
2023
ASSETS
Cash and equivalents
$
1,397,664
$
1,806,583
Restricted cash
57,472
42,594
Total cash, cash equivalents, and
restricted cash
1,455,136
1,849,177
House and land inventory
12,641,932
11,795,370
Land held for sale
24,914
23,831
Residential mortgage loans
available-for-sale
556,664
516,064
Investments in unconsolidated entities
213,022
166,913
Other assets
1,897,985
1,545,667
Goodwill
68,930
68,930
Other intangible assets
48,802
56,338
Deferred tax assets
47,708
64,760
$
16,955,093
$
16,087,050
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities:
Accounts payable
$
704,663
$
619,012
Customer deposits
597,820
675,091
Deferred tax liabilities
401,142
302,155
Accrued and other liabilities
1,539,476
1,645,690
Financial Services debt
524,093
499,627
Notes payable
1,623,686
1,962,218
5,390,880
5,703,793
Shareholders' equity
11,564,213
10,383,257
$
16,955,093
$
16,087,050
PulteGroup, Inc.
Consolidated Statements of
Cash Flows
($000's omitted)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating
activities:
Net income
$
2,170,023
$
1,891,379
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income tax expense
116,013
132,389
Land-related charges
19,929
16,978
Depreciation and amortization
64,975
59,765
Equity income from unconsolidated
entities
(42,577
)
(4,348
)
Distributions of income from
unconsolidated entities
2,557
4,564
Share-based compensation expense
39,247
38,401
Other, net
(74
)
(863
)
Increase (decrease) in cash due to:
Inventories
(805,331
)
(173,377
)
Residential mortgage loans
available-for-sale
(45,184
)
262,637
Other assets
(366,279
)
(142,131
)
Accounts payable, accrued and other
liabilities
(40,115
)
(177,050
)
Net cash provided by operating
activities
1,113,184
1,908,344
Cash flows from investing
activities:
Capital expenditures
(94,065
)
(67,561
)
Investments in unconsolidated entities
(15,105
)
(18,059
)
Distributions of capital from
unconsolidated entities
9,017
2,316
Other investing activities, net
(8,197
)
(11,727
)
Net cash used in investing activities
(108,350
)
(95,031
)
Cash flows from financing
activities:
Repayments of notes payable
(350,453
)
(86,794
)
Financial Services borrowings
(repayments), net
24,465
(161,254
)
Debt issuance costs
—
(1,500
)
Proceeds from liabilities related to
consolidated inventory not owned
46,256
108,707
Payments related to consolidated inventory
not owned
(94,121
)
(49,379
)
Share repurchases
(879,999
)
(700,000
)
Cash paid for shares withheld for
taxes
(18,463
)
(10,409
)
Dividends paid
(126,560
)
(107,676
)
Net cash used in financing activities
(1,398,875
)
(1,008,305
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(394,041
)
805,008
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
$
1,455,136
$
1,899,561
Supplemental Cash Flow
Information:
Interest paid (capitalized), net
$
20,144
$
11,048
Income taxes paid (refunded), net
$
546,344
$
546,871
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
HOMEBUILDING:
Home sale revenues
$
4,343,227
$
3,886,908
$
12,610,981
$
11,433,476
Land sale and other revenues
19,284
39,905
96,327
107,575
Total Homebuilding revenues
4,362,511
3,926,813
12,707,308
11,541,051
Home sale cost of revenues
(3,091,267
)
(2,739,596
)
(8,897,835
)
(8,068,287
)
Land sale and other cost of revenues
(25,287
)
(35,007
)
(101,204
)
(92,467
)
Selling, general, and administrative
expenses
(406,897
)
(353,167
)
(1,125,637
)
(1,004,323
)
Equity income from unconsolidated
entities, net
2,508
891
41,527
3,293
Other income, net
9,702
18,431
39,709
33,836
Income before income taxes
$
851,270
$
818,365
$
2,663,868
$
2,413,103
FINANCIAL SERVICES:
Income before income taxes
$
54,926
$
28,949
$
159,283
$
89,346
CONSOLIDATED:
Income before income taxes
$
906,196
$
847,314
$
2,823,151
$
2,502,449
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Home sale revenues
$
4,343,227
$
3,886,908
$
12,610,981
$
11,433,476
Closings - units
Northeast
391
344
1,054
996
Southeast
1,340
1,291
4,284
3,864
Florida
1,984
1,983
6,051
5,802
Midwest
1,194
1,018
3,380
2,693
Texas
1,485
1,211
4,285
4,030
West
1,530
1,229
4,062
3,603
7,924
7,076
23,116
20,988
Average selling price
$
548
$
549
$
546
$
545
Net new orders - units
Northeast
385
376
1,226
1,161
Southeast
1,340
1,374
4,130
4,277
Florida
1,681
1,598
5,399
5,386
Midwest
1,233
1,090
3,772
3,426
Texas
1,134
1,258
3,863
4,070
West
1,258
1,369
4,669
4,046
7,031
7,065
23,059
22,366
Net new orders - dollars
$
3,928,860
$
3,823,619
$
12,986,027
$
11,884,620
Unit backlog
Northeast
739
639
Southeast
2,092
2,319
Florida
3,140
4,225
Midwest
2,084
2,083
Texas
1,215
1,829
West
2,819
2,452
12,089
13,547
Dollars in backlog
$
7,694,761
$
8,125,182
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
MORTGAGE ORIGINATIONS:
Origination volume
5,005
4,362
14,442
12,770
Origination principal
$
2,103,197
$
1,745,952
$
5,998,347
$
5,053,379
Capture rate
86.7
%
83.5
%
85.9
%
80.5
%
Supplemental Data
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Interest in inventory, beginning of
period
$
149,362
$
141,994
$
139,078
$
137,262
Interest capitalized
26,443
31,659
86,346
95,388
Interest expensed
(29,708
)
(33,643
)
(79,327
)
(92,640
)
Interest in inventory, end of period
$
146,097
$
140,010
$
146,097
$
140,010
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
September 30,
2024
December 31,
2023
Notes payable
$
1,623,686
$
1,962,218
Shareholders' equity
11,564,213
10,383,257
Total capital
$
13,187,899
$
12,345,475
Debt-to-capital ratio
12.3
%
15.9
%
Notes payable
$
1,623,686
$
1,962,218
Less: Total cash, cash equivalents,
and
restricted cash
(1,455,136
)
(1,849,177
)
Total net debt
$
168,550
$
113,041
Shareholders' equity
11,564,213
10,383,257
Total net capital
$
11,732,763
$
10,496,298
Net debt-to-capital ratio
1.4
%
1.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022112622/en/
Investors: Jim Zeumer (404) 978-6434
jim.zeumer@pultegroup.com
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