PulteGroup pulls 2020 forecast as pandemic hammers home demand

(Reuters) - U.S. homebuilder PulteGroup Inc PHM.N on Thursday withdrew its 2020 financial forecast and suspended its share buyback programme, citing a hit to demand from the coronavirus crisis that has put millions of Americans out of work.

The U.S. housing sector had been growing steadily on the back of lower interest rates and a strong job market prior to the pandemic, which has raised concerns of the sharpest slowdown in economic growth since the Great Depression of the 1930s.

Pulte experienced a sharp drop in consumer traffic and sales activity starting in mid-March as governments imposed stay-in-place orders, Chief Executive Officer Ryan Marshall said.

Larger rivals, D.R. Horton Inc DHI.N and Lennar Corp LEN.N, had also abandoned their full-year financial targets, citing a jump in order cancellations due to lockdowns aimed at curbing the spread of the virus.

Home sales at Pulte rose to 5,373 homes in the first quarter ended March 31, from 4,635 a year earlier, while orders, an indicator of future demand, climbed about 16% to 7,495 homes.

Analysts on average had estimated deliveries of 5,498 homes, and orders of 7,537 homes, according to IBES data from Refinitiv.

The company, which took an impairment charge of about $20.2 million, said net income rose to $203.7 million, or 74 cents per share, in the quarter, from $166.8 million, or 59 cents per share, a year earlier.

Revenue rose about 15% to $2.29 billion.

In January, Pulte forecast 2020 deliveries between 25,500 and 26,250 homes, with the average sales price between $415,000 and $420,000, and gross margin in the range of 23.0% to 23.4%.

Reporting by Ankit Ajmera in Bengaluru; Editing by Aditya Soni