) fourth quarter 2012 adjusted earnings (excluding tax benefit)
of 34 cents per share beat the Zacks Consensus Estimate of 31
cents by 9.7% and was significantly better than adjusted earnings
of 11 cents in the prior-year quarter, driven by strong top-line
PulteGroup reported total revenue of $1.57 billion in the
quarter, up 24.6% year over year, owing to double-digit revenue
growth in the homebuilding segment. Total revenue beat the Zacks
Consensus Estimate of $1.46 billion.
The company benefited from stabilizing recovery in the housing
market. This was backed by low home prices and moderating
interest rates as renting became a more expensive option luring
buyers to new homes. A recovering homebuilding market combined
with PulteGroup's cost reduction initiatives and operating
efficiency led to the comprehensive beat in the quarter.
Pulte's homebuilding revenues, derived from popular brands like
Pulte Homes, Centex and Del Webb, rose 23.6% to $1.52 billion,
driven by an increase in number of homes closed and average
New home orders were up 27% year over year to 3,926 homes in the
quarter, attributable to rising home demand in all the regions.
All the segments reported growth in new orders in the quarter,
although there was a 4% decline in the number of communities. The
value of new orders grew 41% year over year to $1.17 billion in
Home sales increased 27% to $1.5 billion, driven by rise in
volume and prices. Home closings were up 20% year over year to
5,154 homes in the reported quarter owing to increase in sales in
most segments excluding Northeast. The average sales price of
homes delivered stood at $287,000, up 6% year over year
attributable to a change in mix towards move-up homes and price
Quarter-end sales order backlog rose 65% to 6,458 homes as of Dec
31, 2012 from 3,924 homes as of Dec 31, 2011. The value of the
backlog rose 82.0% to $1.93 billion as of Dec 31, 2012 from $1.06
billion as of Dec 31, 2011. The backlog rose owing to significant
net sales order increase.
Financial Services segment revenue was $48.5 million in the
fourth quarter of 2012, up 54.5% year over year, owing to higher
loans origination and increased gains on mortgage sales.
Adjusted gross margins expanded 320 basis points year over year
and 20 basis points sequentially to 21.8%. It was driven by
pricing benefits, improved operating efficiency and a better mix
of sales, particularly of move-up homes.
The company intends to invest $250 million per year in land and
related development in 2013 and 2014.
We appreciate Pulte's consistent year-over-year growth in
homebuilding revenues driven by an increase in new home orders
and average selling prices. Moreover, improving homebuilding
revenues combined with the company's cost control initiatives are
PulteGroup carries a Zacks Rank #2 (Buy).
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Meritage Homes Corporation
), Earnings ESP(Read:
Zacks Earnings ESP: A Better Method
) of +4.76% and a Zacks Rank #1 (Strong Buy).
MDC Holdings Inc.
), Earnings ESP of +11.63% and a Zacks Rank #1 (Strong Buy).
Ryland Group Inc.
), Earnings ESP of +7.14% and a Zacks Rank #1 (Strong Buy).
MDC HLDGS (MDC): Free Stock Analysis Report
MERITAGE HOMES (MTH): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
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