PulteGroup beats profit estimates as home sales rise

(Reuters) - U.S. homebuilder PulteGroup Inc PHM.N, the No. 3 U.S. homebuilder, reported a higher-than-expected quarterly profit as it sold more homes at higher prices heading into the crucial spring selling season.

Orders, a key metric of future revenue for homebuilders, rose 8.4 percent to 6,126 homes in the first quarter.

“Buyer interest during the spring selling season of 2017 has been high and points to the ongoing strength in recovery for the housing industry,” Chief Executive Ryan Marshall said on Tuesday.

Pulte, which sells single-family detached homes, said the average price of homes increased to $375,000 from $353,000 a year earlier, while the number of homes sold rose to 4,225 from 3,945.

The company’s net income rose to $91.5 million, or 28 cents per share, in the first quarter ended March 31, from $83.3 million, or 24 cents per share, a year earlier.

Excluding one-time items, the company earned 31 cents per share, beating the average analyst estimate of 29 cents, according to Thomson Reuters I/B/E/S.

Total revenue rose 13.7 percent to $1.63 billion but came in short of the average estimate $1.75 billion.

Last week, bigger rival D.R. Horton Inc DHI.N reported a quarterly profit that edged past estimates but was not enough to allay concerns about the resilience of a recovery in the U.S. housing market.

A string of weak housing data in recent weeks has also weighed on the sector. Single-family homebuilding, which accounts for the largest share of the residential housing market, fell 6.2 percent in March.

Reporting by Arunima Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty