* First-quarter EPS $0.21 vs loss/share $0.03 a year earlier
* Revenue rises 32 pct to $1.16 billion
* New orders rise 4 percent to 5,200 homes
* Average selling price rises 10 percent to $287,000
April 25 PulteGroup Inc, the No. 2 U.S.
homebuilder, reported a better-than-expected quarterly profit as
its strategy of selling fewer homes at higher prices paid off.
Pulte, which sells homes under brands including Pulte Homes,
Centex and Del Webb, said its average selling price rose 10
percent to $287,000 in the first quarter compared to a year
Growth in the number of homes booked during the quarter
slowed to 4 percent, but the value of new orders rose to $1.58
billion from $1.3 billion a year earlier.
The number of homes booked had increased 27 percent in the
three months ended December, and had shown double-digit growth
throughout 2012 as the housing market started to recover on
lower interest rates and rising rents.
But a shortage of new property ready for home development is
forcing Pulte to moderate its sales pace. The number of
communities Pulte had at the end of the first quarter fell 14
percent to 650 from a year earlier.
Homebuilders had reined in land purchases during the
downturn that began six years ago, and with surging demand,
finished lots have become scarce in some markets.
"Accelerating sales pace means that we sell out of
neighborhoods sooner and have to look to the next community
which may not have been developed yet," Chief Executive Richard
Dugas said on a conference call.
Pulte has managed to make the shortage work in its favor by
pressing prices higher, said Williams Financial Group analyst
"Pulte is trying to protect their land assets better, the
quality land assets. They want to keep as many as possible, so
that they can keep driving up prices and profitability, this is
Williams said he was no longer worried about the demand in
the market, and considered pricing a more important indicator
than the number of orders.
"I am not as concerned with demand as I am with their
ability to be profitable, or to change their fundamentals and
take advantage of that demand," he said.
The company reported a net income of $81.8 million, or 21
cents per share, for the first quarter, compared with a loss of
$11.7 million, or 3 cents per share, a year earlier. Revenue
rose 32 percent to $1.16 billion.
Analysts on average had expected the company to earn 15
cents per share, on revenue of $1.19 billion, according to
Thomson Reuters I/B/E/S.
"We saw a consistent growth through the quarter although we
purposely tempered down sales activity and controlled price,
even more through the quarter. So that influenced our trends a
little bit, and we are pleased with the resulting sales pace
we've seen so far in April," the CEO added.
The company had an order backlog, an indication of future
sales, worth $2.41 billion. Orders are a key indicator for
builders who do not recognize revenue until they close on a
Pulte shares were trading up 6.4 percent at $20.94, on the
New York Stock Exchange on Wednesday midday.