PulteGroup Inc ( PHM ) is set to report
fourth quarter 2012 results on Jan 31. Last quarter it posted an
earnings surprise of 35.0%. Let's see how things are shaping up for
Growth Factors this Past Quarter
The rising demand for new homes has led to a favorable situation
in the housing market, where inventory levels are dropping and
prices are moving up. Homebuilders like Pulte with significant land
positions, broad geographic and product diversity, and better
The company is witnessing better year-over-year growth in
homebuilding revenues driven by an increase in new home orders and
average selling prices. The company has been lowering its community
count in order to improve long-term returns. Moreover, improving
homebuilding revenues combined with the company's cost control
initiatives are boosting margins.
Our proven model does not conclusively show that Pulte is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive Earnings ESP (Read: Zacks ESP: A Better Method ) and a Zacks Rank
#1, 2 or 3 for this to happen. That is not the case here as you
will see below.
Negative Zacks ESP: Pulte's currently has an
Earnings Expected Surprise Prediction (ESP) of -3.23%.
Zacks Rank #2 (Buy): Pulte's Zacks Rank #2
(Buy) when combined with a negative ESP lowers the predictive power
of ESP earnings and makes surprise prediction difficult. We caution
against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going
into the earnings announcement, especially when the company is
seeing negative estimate revisions momentum.
Other Stocks to Consider
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 ( MTH ), Earnings ESP of
+4.76% and Zacks Rank #1 (Strong Buy).MDC HLDGS (MDC): Free Stock Analysis ReportMERITAGE HOMES (MTH): Free Stock Analysis
ReportPULTE GROUP ONC (PHM): Free Stock Analysis
ReportRYLAND GRP INC (RYL): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
MDC Holdings Inc. ( MDC ), Earnings ESP of
+11.63% and Zacks Rank #1 (Strong Buy).
Ryland Group Inc. ( RYL ), Earnings ESP of
+6.00% and Zacks Rank #2 (Buy).