UPDATE 2-Higher home prices boost PulteGroup revenue

Thu Jan 30, 2014 8:36am EST

* Fourth-quarter earnings $0.57 vs est $0.44

* Home sale revenue rises 9 pct

* Average selling price climbs 13 pct

* To spend $700 mln more on land in 2014

* Shares rise as much as 5 pct premarket

Jan 30 (Reuters) - U.S. homebuilder PulteGroup Inc's fourth-quarter revenue rose 9 percent after the company raised selling prices, taking advantage of the shrinking supply of existing homes and a shortage of land ready to build on.

The No.2 U.S. homebuilder, whose shares rose as much as 5 percent in premarket trading, said it would step up spending on land in 2014 even though orders have fallen.

When demand slowed recently due to higher mortgage rates, No.1 U.S. homebuilder D.R. Horton Inc and PulteGroup were hit more than some smaller peers due to their lower presence in city centers.

Orders booked by PulteGroup, which caters to first-time buyers and first move-up buyers, fell 18 percent to 3,214 homes in the quarter ended Dec. 31.

However, as consumer confidence grows in the economy and Americans get comfortable with higher interest rates, PulteGroup plans to spend about $700 million more on land compared with last year, bringing the total investment in 2014 to $2 billion.

Larger peer D.R. Horton Inc reported a 4 percent rise in quarterly orders on Tuesday and said it expected a "very strong" spring home-selling season.

PulteGroup has slowed the pace at which it builds houses and has instead relied on raising selling prices to drive revenue.

PulteGroup's average sales price rose 13 percent to $325,000 in the quarter, more than offsetting the impact of a 4 percent fall in homes completed.

The company's net income jumped nearly four times to $220.1 million, or 57 cents per share, in the fourth quarter from $58.7 million, or 15 cents per share, a year earlier.

Analysts on average had expected 44 cents per share, according to Thomson Reuters I/B/E/S.

Home sale revenue rose to $1.61 billion from $1.48 billion.

PulteGroup shares have dropped 9 percent in the past year while Dow Jones Home Construction index fell 5 percent.

The stock, which closed at $19.43 on the New York Stock Exchange on Wednesday, was up at $20.40 in premarket trading on Thursday.