By Dow Jones Business News, October 24, 2013, 07:35:00 AM EDT
PulteGroup Inc.'s ( PHM ) third-quarter earnings soared as the home builder logged a large tax benefit, while an
increase in closings and selling prices boosted revenue.
Pulte's sales are considered a strong barometer for the sector because the company, one of the nation's largest
builders, constructs everything from entry-level homes to units for retirees nationwide. Builders have benefited from a
low supply of existing-home inventory in recent periods, though the industry experienced weak demand in the latest
"While consumers have recently slowed home purchases due to higher home prices, a rapid rise in mortgage rates, and
political and economic uncertainty, we believe the slowdown will ultimately prove to be short lived within a sustained,
multiyear housing recovery," said Chairman and Chief Executive Richard Dugas, Jr.
The company's new orders were down 17% from a year earlier. Closings, meanwhile, increased 9%.
Overall, Pulte reported a profit of $2.28 billion, or $5.87 a share, up from $116.6 million, or 30 cents a share, a
year earlier. The latest period included a gain of $5.42 a share from the reversal of the company's deferred tax asset
valuation allowance. Excluding special items, adjusted earnings rose to 45 cents a share in the latest period.
Total revenue jumped 21% to $1.58 billion.
Analysts polled by Thomson Reuters expected earnings of 36 cents on revenue of $1.46 billion.
Home-building cost of revenue increased 18%. Home sale gross margin, excluding items like impairments, increased to
22.5% from 21.6%. The average selling price jumped 11% to $310,000.
Shares closed at $16.68 and were inactive premarket. The stock is down 9.6% over the past three months.
Write to Nathalie Tadena at email@example.com
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