) reached a 52-week high of $22.78 on Friday, May 03, 2013
gaining momentum from solid first quarter results announced on
Apr 25. The closing price of the shares on May 03 was $22.32. The
rate of return is 20.0%.
Share Price Drivers
PulteGroup reported strong first-quarter 2013 results on the
back of double-digit increases in home sales, improved sales
prices, gross margin expansion and solid overhead leverage.
PulteGroup's first quarter 2013 adjusted earnings of 21 cents
per share beat the Zacks Consensus Estimate by 31.3%. Earnings
were significantly better than the prior-year quarter loss of 3
cents, driven by improved demand for homes.
PulteGroup reported 31.8% year-over-year increase in total
revenue in the quarter, owing to double-digit revenue growth in
the homebuilding segment. Total revenue beat the Zacks Consensus
Estimate of $1.14 billion by 1.8%.
Pulte's Homebuilding revenues, derived from popular brands
like Pulte Homes, Centex and Del Webb, rose 32.9%, driven by an
increase in new home orders and average selling prices.
The company benefited from stabilizing recovery in the housing
market. This was backed by low interest rates and high
affordability as renting became a more expensive option luring
buyers to new homes. The company also witnessed strong gross
margin expansion and solid overhead leverage during the
Adjusted homebuilding gross margins expanded 420 basis points
(bps) from the prior-year quarter and 110 bps sequentially to
22.9% of home sales. It was driven by improved demand and pricing
and better mix of sales (particularly of higher priced move-up
Solid overhead leverage brought down selling, general and
administrative expenses by 340 basis points to 11.8% of
Based on the robust operational efficiency witnessed in the
quarter and the assumption that the housing recovery will
continue to gain momentum, the company increased its investment
in land and development for 2013 and 2014 to 1.4 billion
annually. The strong investment in land strengthens the company's
position for the upcoming quarters when the demand for new homes
is expected to be higher than supply.
The robust quarterly results and a promising outlook for the
upcoming quarters led to an upward movement in estimates. In
fact, the Zacks Consensus Estimate for 2013 and 2014 increased a
respective 17.1% and 3.0% to $1.30 and $1.39 over the last 30
PulteGroup carries a Zacks Rank #2 (Buy).
Other stocks in the homebuilding sector that are performing
well and therefore deserve a mention include
D. R. Horton Inc.
Ryland Group Inc.
MDC Holdings Inc.
). While D. R. Horton and Ryland Group carry a Zacks Rank #1
(Strong Buy), MDC holds Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
MDC HLDGS (MDC): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
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