April 24, 2014 / 11:20 AM / 4 years ago

UPDATE 1-Shortage of developed land hits PulteGroup profit

* First-quarter home sales revenue drops 1 pct

* Earnings $0.19/share vs $0.21/share a year earlier

* Home closings fall 10 pct

* Average selling price rises 10 pct (Adds details, background, shares)

April 24 (Reuters) - PulteGroup Inc, the No. 2 U.S. homebuilder, reported an 8 percent drop in first-quarter profit as a shortage of developed land constrained its ability to build more homes.

The company also reported a 6 percent drop in orders as it slows the pace of new-home building to focus on raising selling prices and improving margins.

PulteGroup’s average selling price rose 10 percent to $317,000, but was not enough to offset a 10 percent drop in the number of completed homes.

Home sales revenue fell 1 percent to $1.09 billion.

The company’s net income dropped to $74.8 million, or 19 cents per share, in the quarter ended March 31, from $81.8 million, or 21 cents per share, a year earlier.

PulteGroup’s shares closed at $18.57 on the New York Stock Exchange on Wednesday. They have dropped 9 percent so far this year, compared with a 6 percent decline in the Dow Jones U.S. Home Construction index. (Reporting by Sagarika Jaisinghani in Bangalore; Editing by Sriraj Kalluvila and Maju Samuel)

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