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PulteGroup profit beats estimates on strong demand for homes

(Reuters) - U.S. homebuilder PulteGroup Inc PHM.N on Thursday reported a higher-than-expected quarterly profit, as record-low mortgage rates encouraged more Americans to buy homes, sending its shares up 2% in premarket trading.

With interest rates hovering near lows of 3% and more people shifting away from densely populated areas towards suburban living amid a pandemic, the U.S. housing sector continues to recover sharply from the COVID-19 crisis.

“The dramatic rebound in housing demand that began in May continued through the third quarter,” Chief Executive Officer Ryan Marshall said in a statement.

“While COVID-19 still weighs on much of the U.S. economy, housing demand continued to benefit from low interest rates, supportive demographics, limited housing supply and a desire for new homes with features that can meet the evolving needs of today’s homebuyers.”

Pulte’s sales rose 4% to 6,454 homes in the third quarter ended Sept. 30 from a year earlier, while orders, an indicator of future demand, jumped 36% to 8,202 homes.

The company said net income rose to $416.4 million, or $1.54 per share, from $273.1 million, or 99 cents per share.

Excluding a tax benefit of $53 million, Pulte earned $1.34 per share, beating analysts’ average estimate of $1.12, according to IBES data from Refinitiv.

Revenue rose 9% to $2.95 billion, ahead of analysts’ expectations of $2.73 billion.

Reporting by Ankit Ajmera in Bengaluru; Editing by Shinjini Ganguli

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