PulteGroup Shares Rise 5.8% After Earnings Miss as Orders Fall

PulteGroup shares gained about 5.8% Thursday, Oct. 22, after the homebuilder posted lower third-quarter earnings and revenue alongside a 6% decline in net new orders, signaling weaker home-sales activity.

The shares were lower before the opening bell but finished the regular session higher. PulteGroup released its results at 6:30 a.m. ET (10:30 UTC), ahead of the market open. The reversal came even as the company’s main quarterly totals fell from a year earlier and missed analyst estimates.

For the three months ended Sept. 30, net income was $475.7 million, or $2.53 per diluted share. The year-earlier quarter brought net income of $585.8 million and diluted earnings of $2.96 per share. Analysts had expected $2.64 per share. Revenue totaled $3.974 billion, down from $4.405 billion, against an estimate of $4.15 billion.

Revenue from home sales came to $3.859 billion, 9% below the year-earlier level. PulteGroup closed 6,876 homes, a 9% decline, while the average selling price eased 1% to $561,000. The company’s home-sale gross margin narrowed to 24.8% from 26.2% and included $26 million in land impairments. The company’s third-quarter revenue and home-closing results were detailed in earlier coverage.

Net new orders totaled 6,208 homes, down 6% year over year, while the average community count rose 7% to 1,077. At Sept. 30, the backlog stood at 10,298 homes, up 4%, with a stated value of $6.4 billion.

Mortgage rates, inflation and global unrest were among the pressures on homebuying demand. “The rapid increase in interest rates has stretched affordability even further,” Marshall said. Move-up and active-adult buyers made up more than 60% of the company’s business.