PulteGroup's Q4 Earnings & Revenues Top, Net New Orders Down

PulteGroup Inc. PHM has reported remarkable fourth-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The quarter’s result reflects the company’s success in addressing the affordability issues of the housing market due to a still high mortgage rate. By implementing several operational changes including targeted sales incentives and faster construction cycle times, it was able to drive its home sales and foster new orders. Also, the increase in the average selling price (ASP) of homes closed aided the quarter’s top-line growth.Furthermore, in 2024, PHM invested about $5.3 billion into its business, returned $1.4 billion to its shareholders through stock repurchases and dividends and generated a return on equity of 27.5%.Although the Fed trimmed down interest rates from September 2024, the move did not favorably address the affordability issues as the mortgage rates stayed elevated. To foster homebuying into 2025, the company aims to continue executing the operational changes to gather sufficient sales backlog and inventory to cater to the demand trends.Shares of this notable homebuilder gained 3.6% during the pre-market trading session on Thursday, following the earnings release.Inside PHM’s HeadlinesThe company reported adjusted earnings of $3.50 per share, which topped the Zacks Consensus Estimate of $3.24 by 8%. In the year-ago quarter, PHM reported adjusted earnings per share (EPS) of $3.28.PulteGroup, Inc. Price, Consensus and EPS Surprise PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. QuoteTotal revenues of $4.92 billion also surpassed the consensus mark of $4.66 billion by 5.6% and increased 14.7% from the year-ago figure of $4.29 billion.Segmental Discussion of PulteGroupPulteGroup primarily operates through two business segments, Homebuilding and Financial Services.Homebuilding: Revenues from this segment were up year over year to $4.81 billion from $4.2 billion. The increase was driven by rising home sale and land sale revenues. Home sale revenues increased 13% year over year to $4.71 billion. Land sale and other revenues also increased to $99.1 million from $34.5 million a year ago.The number of homes closed increased 6% to 8,103 units from the year-ago level. The ASP of homes delivered was $581,000, up 6% year over year.Net new home orders marginally declined 0.8% year over year to 6,167 units. Yet, the value of new orders rose 4% from a year ago to $3.51 billion.PHM’s backlog, which represents orders yet to be closed, was 10,153 units, down 16.4% year over year. In addition, potential housing revenues from the backlog were down year over year to $6.49 billion from $7.32 billion.Home sales gross margin was down 140 basis points (bps) year over year to 27.5%. SG&A expenses (as a percentage of home sales revenues) contracted 320 bps to 4.2% from 7.4% a year ago.Financial Services: Revenues from this segment increased 22.6% year over year to $115.1 million. Pretax income for the segment increased 16% to $51 million from the year-ago figure of $44 million. The increase in pre-tax income reflects the benefit of higher volumes and ASP in PulteGroup’s homebuilding operations, accompanied with a slightly higher mortgage capture rate of 86%, up from 85% a year ago.Sneak Peek at PulteGroup’s 2024 ResultsThe company’s total annual revenues were $17.95 billion, up from $16.06 billion reported a year ago. Home sales revenues increased to $17.32 billion from $15.6 billion reported last year.Revenues from Financial Services increased 35% year over year to $433 million.PHM’s FinancialsAt the end of the fourth quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.65 billion, down from $1.85 billion at the end of 2023. Net debt-to-capital was (0.3)% in 2024 end against 1.1% in 2023-end.Net cash provided by operating activities was $1.68 billion in 2024 compared with $2.2 billion in the prior-year period.In 2024, the company repurchased 10.1 million common shares for $1.2 billion at an average price of $119.21 per share.PHM’s Zacks Rank & Recent Construction ReleasesPulteGroup currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank ( Strong Buy) stocks here.NVR, Inc. NVR reported impressive fourth-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis. The quarterly performance showed strong growth in settlements. Although new orders decreased in the quarter, the average selling price increased.NVR’s new orders decreased 8% from the prior-year quarter’s level to 4,794 units. However, the ASP of new orders increased 4% from the prior-year quarter’s figure to $469,000. On a unit basis, backlog at the end of Dec. 31, 2024, decreased 3% from the prior-year quarter’s figure to 9,953 homes but rose 1% on a dollar basis to $4.79 billion.D.R. Horton, Inc. DHI reported first-quarter fiscal 2025 (ended Dec. 31, 2024) results, with earnings and revenues beating Zacks Consensus Estimate but decreasing on a year-over-year basis. Despite rising home inventories, the supply of affordable homes remains constrained, while favorable demographics continue to drive housing demand.To address affordability challenges and stimulate sales, the company leveraged incentives such as mortgage rate buydowns. Additionally, D.R. Horton focused on offering smaller, affordable floor plans to align with the needs of cost-conscious homebuyers. DHI expects consolidated 2024 revenues to be in the range of $36-$37.5 billion compared with $36.8 billion in fiscal 2023. Homes closed are anticipated to be within 90,000-92,000 units.KB Home KBH reported impressive fiscal fourth-quarter 2024 results, wherein both revenues and earnings surpassed expectations. On a year-over-year basis, both metrics increased, highlighting its resilience in a fluctuating housing market.KBH’s results underscore the effectiveness of its strategy, driven by faster build times and a strong appetite for homeownership despite mortgage rate pressures. However, challenges such as mortgage rate headwinds and potential regulatory shifts could temper the pace of growth. While challenges remain, its strong order book and expanded community count suggest a solid growth trajectory for 2025.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PulteGroup, Inc. (PHM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report D.R. Horton, Inc. (DHI): Free Stock Analysis Report NVR, Inc. (NVR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks