- Net Income Increased 8% to $2.90 Per Share
- Home Sale Revenues Increased 3% to $3.9 Billion
- Home Sale Gross Margin of 29.5%
- Net New Orders Increased 43% to 7,065 Homes with a Value of
$3.8 Billion
- Unit Backlog Totaled 13,547 Homes with a Value of $8.1
Billion
- Repurchased $300 Million of Common Shares and Retired $65
Million of Senior Notes in the Quarter
- Debt-to-Capital Ratio Reduced to 16.5%; Net Debt-to-Capital
Ratio of 1% Including Company’s Cash Balance of $1.9
Billion
PulteGroup, Inc. (NYSE: PHM) announced today financial results
for its third quarter ended September 30, 2023. For the quarter,
the Company reported net income of $639 million, or $2.90 per
share. In the prior year period, the Company reported net income of
$628 million, or $2.69 per share.
“PulteGroup’s third quarter results show a continuation of
recent positive trends, as top line revenue growth combined with
strong margin performance drove record third quarter earnings of
$2.90 per share,” said Ryan Marshall, PulteGroup President and CEO.
“Earnings growth and disciplined balance sheet management allowed
the Company to realize a return on equity* of 30.1%, while using
the resulting cash flows to invest in our business, to repurchase
$300 million of common shares, to retire $65 million of senior
notes and to further strengthen our overall liquidity profile.”
“Fed actions and broader market forces have combined to push
interest rates to 20-year highs, but the fundamental desire for
homeownership is strong while the supply of houses remains
constrained,” added Mr. Marshall. “PulteGroup’s ability to offer a
variety of locations, price points, floor plans and incentive
packages allows us to meet consumer needs while helping to address
the affordability challenges caused by today’s higher rates.”
Third Quarter Results
The Company’s third quarter home sale revenues increased 3% over
the prior year to $3.9 billion. Higher revenues for the period were
driven primarily by a 2% increase in the average sales price of
homes closed to $549,000, as closings increased by less than 1% to
7,076 homes.
For its third quarter, the Company reported home sale gross
margin of 29.5%, compared with prior year gross margin of 30.5%.
Homebuilding SG&A expense for the period was $353 million, or
9.1% of home sale revenues compared with $350 million, or 9.2% in
the prior year period.
In the third quarter, the Company’s net new orders increased 43%
over the prior year to 7,065 homes. The value of net new orders in
the period increased 36% over last year to $3.8 billion. The
Company’s average community count for the third quarter was 923,
which is up 12% from the comparable prior year period.
The Company’s unit backlog at the end of the third quarter was
13,547 homes with a value of $8.1 billion.
Third quarter pre-tax income for the Company's financial
services operations increased 5% over the prior year to $29
million. Mortgage capture rate for the third quarter was 84%, up
from 77% last year.
The Company’s third quarter pre-tax income totaled $847 million,
which is an increase of 4% over the prior year. Income tax expense
for the third quarter was $209 million, or an effective tax rate of
24.6%.
In the third quarter, PulteGroup repurchased 3.8 million of its
common shares for $300 million, or an average price of $79.84 per
share. Through the first nine months of 2023, PulteGroup has
repurchased 10.2 million common shares, or 4.5% of shares
outstanding, for $700 million, or $68.76 per share. During the
third quarter, the Company also retired a total of $65 million of
its 2026 and 2027 senior notes via open market repurchases. After
these equity and debt repurchases, the Company ended the quarter
with $1.9 billion of cash and a debt-to-capital ratio of 16.5%.
A conference call discussing PulteGroup's third quarter 2023
results is scheduled for Tuesday, October 24, 2023, at 8:30 a.m.
Eastern Time. Interested investors can access the live webcast via
PulteGroup's corporate website at www.pultegroupinc.com.
* The Company's return on equity is calculated as net income for
the trailing twelve months divided by average shareholders' equity,
where average shareholders' equity is the sum of ending
shareholders' equity balances of the trailing five quarters divided
by five.
Forward-Looking Statements
This release includes “forward-looking statements.” These
statements are subject to a number of risks, uncertainties and
other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “plan,” “project,” “may,” “can,” “could,”
“might,” “should,” “will” and similar expressions identify
forward-looking statements, including statements related to any
potential impairment charges and the impacts or effects thereof,
expected operating and performing results, planned transactions,
planned objectives of management, future developments or conditions
in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future.
Such risks, uncertainties and other factors include, among other
things: interest rate changes and the availability of mortgage
financing; the impact of any changes to our strategy in responding
to the cyclical nature of the industry or deteriorations in
industry changes or downward changes in general economic or other
business conditions, including any changes regarding our land
positions and the levels of our land spend; economic changes
nationally or in our local markets, including inflation, deflation,
changes in consumer confidence and preferences and the state of the
market for homes in general; labor supply shortages and the cost of
labor; the availability and cost of land and other raw materials
used by us in our homebuilding operations; a decline in the value
of the land and home inventories we maintain and resulting possible
future writedowns of the carrying value of our real estate assets;
competition within the industries in which we operate; governmental
regulation directed at or affecting the housing market, the
homebuilding industry or construction activities, slow growth
initiatives and/or local building moratoria; the availability and
cost of insurance covering risks associated with our businesses,
including warranty and other legal or regulatory proceedings or
claims; damage from improper acts of persons over whom we do not
have control or attempts to impose liabilities or obligations of
third parties on us; weather related slowdowns; the impact of
climate change and related governmental regulation; adverse capital
and credit market conditions, which may affect our access to and
cost of capital; the insufficiency of our income tax provisions and
tax reserves, including as a result of changing laws or
interpretations; the potential that we do not realize our deferred
tax assets; our inability to sell mortgages into the secondary
market; uncertainty in the mortgage lending industry, including
revisions to underwriting standards and repurchase requirements
associated with the sale of mortgage loans, and related claims
against us; risks related to information technology failures or
data security issues; failure to retain key personnel; the
disruptions associated with the COVID-19 pandemic (or another
epidemic or pandemic or similar public threat or fear of such an
event), and the measures taken to address it; the effect of
cybersecurity incidents and threats; and other factors of national,
regional and global scale, including those of a political,
economic, business and competitive nature. See Item 1A – Risk
Factors in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 for a further discussion of these and other risks
and uncertainties applicable to our businesses. We undertake no
duty to update any forward-looking statement, whether as a result
of new information, future events or changes in our
expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one
of America’s largest homebuilding companies with operations in more
than 40 markets throughout the country. Through its brand portfolio
that includes Centex, Pulte Homes, Del Webb, DiVosta Homes,
American West and John Wieland Homes and Neighborhoods, the company
is one of the industry’s most versatile homebuilders able to meet
the needs of multiple buyer groups and respond to changing consumer
demand. PulteGroup’s purpose is building incredible places where
people can live their dreams.
For more information about PulteGroup, Inc. and PulteGroup
brands, go to pultegroup.com; pulte.com; centex.com; delwebb.com;
divosta.com; jwhomes.com; and americanwesthomes.com. Follow
PulteGroup, Inc. on Twitter: @PulteGroupNews.
PulteGroup, Inc.
Consolidated Statements of
Operations
($000's omitted, except per
share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenues:
Homebuilding
Home sale revenues
$
3,886,908
$
3,791,695
$
11,433,476
$
10,587,080
Land sale and other revenues
39,905
30,658
107,575
97,626
3,926,813
3,822,353
11,541,051
10,684,706
Financial Services
76,720
72,709
226,875
239,627
Total revenues
4,003,533
3,895,062
11,767,926
10,924,333
Homebuilding Cost of Revenues:
Home sale cost of revenues
(2,739,596
)
(2,636,842
)
(8,068,287
)
(7,364,743
)
Land sale and other cost of revenues
(35,007
)
(26,314
)
(92,467
)
(89,971
)
(2,774,603
)
(2,663,156
)
(8,160,754
)
(7,454,714
)
Financial Services expenses
(46,431
)
(45,323
)
(137,244
)
(132,655
)
Selling, general, and administrative
expenses
(353,167
)
(350,112
)
(1,004,323
)
(1,030,391
)
Equity income from unconsolidated
entities, net
891
446
4,348
2,390
Gain on debt retirement
362
—
362
—
Other income (expense), net
16,729
(25,640
)
32,134
(33,220
)
Income before income taxes
847,314
811,277
2,502,449
2,275,743
Income tax expense
(208,539
)
(183,349
)
(611,070
)
(540,657
)
Net income
$
638,775
$
627,928
$
1,891,379
$
1,735,086
Per share:
Basic earnings
$
2.92
$
2.70
$
8.49
$
7.26
Diluted earnings
$
2.90
$
2.69
$
8.45
$
7.22
Cash dividends declared
$
0.16
$
0.15
$
0.48
$
0.45
Number of shares used in calculation:
Basic
218,288
230,967
221,832
237,639
Effect of dilutive securities
1,394
1,333
1,152
1,240
Diluted
219,682
232,300
222,984
238,879
PulteGroup, Inc.
Condensed Consolidated Balance
Sheets
($000's omitted)
(Unaudited)
September 30,
2023
December 31,
2022
ASSETS
Cash and equivalents
$
1,848,451
$
1,053,104
Restricted cash
51,110
41,449
Total cash, cash equivalents, and
restricted cash
1,899,561
1,094,553
House and land inventory
11,585,447
11,326,017
Land held for sale
35,116
42,254
Residential mortgage loans
available-for-sale
414,360
677,207
Investments in unconsolidated entities
162,287
146,759
Other assets
1,426,747
1,291,572
Goodwill
68,930
68,930
Other intangible assets
58,960
66,875
Deferred tax assets
65,855
82,348
$
15,717,263
$
14,796,515
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities:
Accounts payable
$
567,561
$
565,975
Customer deposits
769,893
783,556
Deferred tax liabilities
331,366
215,446
Accrued and other liabilities
1,629,171
1,685,202
Financial Services debt
425,456
586,711
Notes payable
1,981,315
2,045,527
5,704,762
5,882,417
Shareholders' equity
10,012,501
8,914,098
$
15,717,263
$
14,796,515
PulteGroup, Inc.
Consolidated Statements of
Cash Flows
($000's omitted)
Unaudited)
Nine Months Ended
September 30,
2023
2022
Cash flows from operating
activities:
Net income
$
1,891,379
$
1,735,086
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income tax expense
132,389
43,485
Land-related charges
16,978
32,475
Gain on debt retirement
(362
)
—
Depreciation and amortization
59,765
51,934
Equity income from unconsolidated
entities
(4,348
)
(2,390
)
Distributions of income from
unconsolidated entities
4,564
1,278
Share-based compensation expense
38,401
39,520
Other, net
(501
)
952
Increase (decrease) in cash due to:
Inventories
(173,377
)
(2,706,142
)
Residential mortgage loans
available-for-sale
262,637
507,861
Other assets
(142,131
)
(127,173
)
Accounts payable, accrued and other
liabilities
(177,050
)
119,189
Net cash provided by (used in) operating
activities
1,908,344
(303,925
)
Cash flows from investing
activities:
Capital expenditures
(67,561
)
(88,585
)
Investments in unconsolidated entities
(18,059
)
(58,154
)
Distributions of capital from
unconsolidated entities
2,316
3,413
Business acquisition
—
(10,400
)
Other investing activities, net
(11,727
)
(964
)
Net cash used in investing activities
(95,031
)
(154,690
)
Cash flows from financing
activities:
Repayments of notes payable
(86,794
)
(4,856
)
Borrowings under revolving credit
facility
—
1,925,000
Repayments under revolving credit
facility
—
(1,606,000
)
Financial Services repayments, net
(161,254
)
(287,933
)
Debt issuance costs
(1,500
)
(11,167
)
Proceeds from liabilities related to
consolidated inventory not owned
108,707
—
Payments related to consolidated inventory
not owned
(49,379
)
—
Share repurchases
(700,000
)
(974,673
)
Cash paid for shares withheld for
taxes
(10,409
)
(14,326
)
Dividends paid
(107,676
)
(109,597
)
Net cash used in financing activities
(1,008,305
)
(1,083,552
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
805,008
(1,542,167
)
Cash, cash equivalents, and restricted
cash at beginning of period
1,094,553
1,833,565
Cash, cash equivalents, and restricted
cash at end of period
$
1,899,561
$
291,398
Supplemental Cash Flow
Information:
Interest paid (capitalized), net
$
11,048
$
5,642
Income taxes paid (refunded), net
$
546,871
$
493,559
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
HOMEBUILDING:
Home sale revenues
$
3,886,908
$
3,791,695
$
11,433,476
$
10,587,080
Land sale and other revenues
39,905
30,658
107,575
97,626
Total Homebuilding revenues
3,926,813
3,822,353
11,541,051
10,684,706
Home sale cost of revenues
(2,739,596
)
(2,636,842
)
(8,068,287
)
(7,364,743
)
Land sale and other cost of revenues
(35,007
)
(26,314
)
(92,467
)
(89,971
)
Selling, general, and administrative
expenses ("SG&A")
(353,167
)
(350,112
)
(1,004,323
)
(1,030,391
)
Equity income from unconsolidated
entities
891
319
3,293
1,112
Gain on debt retirement
362
—
362
—
Other income (expense), net
18,069
(25,641
)
33,474
(33,151
)
Income before income taxes
$
818,365
$
783,763
$
2,413,103
$
2,167,562
FINANCIAL SERVICES:
Income before income taxes
$
28,949
$
27,514
$
89,346
$
108,181
CONSOLIDATED:
Income before income taxes
$
847,314
$
811,277
$
2,502,449
$
2,275,743
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Home sale revenues
$
3,886,908
$
3,791,695
$
11,433,476
$
10,587,080
Closings - units
Northeast
344
378
996
1,026
Southeast
1,291
1,295
3,864
3,406
Florida
1,983
1,628
5,802
4,840
Midwest
1,018
1,104
2,693
3,179
Texas
1,211
1,431
4,030
4,124
West
1,229
1,211
3,603
3,688
7,076
7,047
20,988
20,263
Average selling price
$
549
$
538
$
545
$
522
Net new orders - units
Northeast
376
237
1,161
1,046
Southeast
1,374
1,081
4,277
3,716
Florida
1,598
1,471
5,386
4,898
Midwest
1,090
655
3,426
2,660
Texas
1,258
979
4,070
3,718
West
1,369
501
4,046
3,275
7,065
4,924
22,366
19,313
Net new orders - dollars
$
3,823,619
$
2,807,308
$
11,884,620
$
11,442,579
Unit backlog
Northeast
639
808
Southeast
2,319
2,786
Florida
4,225
5,488
Midwest
2,083
2,169
Texas
1,829
2,693
West
2,452
3,109
13,547
17,053
Dollars in backlog
$
8,125,182
$
10,581,026
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
MORTGAGE ORIGINATIONS:
Origination volume
4,362
4,369
12,770
12,994
Origination principal
$
1,745,952
$
1,715,344
$
5,053,379
$
5,009,957
Capture rate
83.5
%
77.2
%
80.5
%
78.7
%
Supplemental Data
($000's omitted)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Interest in inventory, beginning of
period
$
141,994
$
151,554
$
137,262
$
160,756
Interest capitalized
31,659
33,235
95,388
96,156
Interest expensed
(33,643
)
(41,120
)
(92,640
)
(113,243
)
Interest in inventory, end of period
$
140,010
$
143,669
$
140,010
$
143,669
PulteGroup, Inc.
Reconciliation of Non-GAAP Financial
Measures
This report contains information about our debt-to-capital
ratios. These measures could be considered non-GAAP financial
measures under the SEC's rules and should be considered in addition
to, rather than as a substitute for, comparable GAAP financial
measures. We calculate total net debt by subtracting total cash,
cash equivalents, and restricted cash from notes payable to present
the amount of assets needed to satisfy the debt. We use the
debt-to-capital and net debt-to-capital ratios as indicators of our
overall leverage and believe they are useful financial measures in
understanding the leverage employed in our operations. We believe
that these measures provide investors relevant and useful
information for evaluating the comparability of financial
information presented and comparing our profitability and liquidity
to other companies in the homebuilding industry. Although other
companies in the homebuilding industry report similar information,
the methods used may differ. We urge investors to understand the
methods used by other companies in the homebuilding industry to
calculate these measures and any adjustments thereto before
comparing our measures to those of such other companies.
The following table sets forth a reconciliation of the
debt-to-capital ratios ($000's omitted):
Debt-to-Capital Ratios
September 30,
2023
December 31,
2022
Notes payable
$
1,981,315
$
2,045,527
Shareholders' equity
10,012,501
8,914,098
Total capital
$
11,993,816
$
10,959,625
Debt-to-capital ratio
16.5
%
18.7
%
Notes payable
$
1,981,315
$
2,045,527
Less: Total cash, cash equivalents,
and
restricted cash
(1,899,561
)
(1,094,553
)
Total net debt
$
81,754
$
950,974
Shareholders' equity
10,012,501
8,914,098
Total net capital
$
10,094,255
$
9,865,072
Net debt-to-capital ratio
0.8
%
9.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231024689543/en/
Investors: Jim Zeumer (404) 978-6434
jim.zeumer@pultegroup.com
PulteGroup (NYSE:PHM)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
PulteGroup (NYSE:PHM)
Historical Stock Chart
Von Mai 2023 bis Mai 2024