- Net Income of $3.21 Per Share
- Home Sale Revenues Increased 8% to $4.1 Billion
- Closings Increased 5% to 7,518 Homes; Average Sales Price Up
3% to $540,000
- Home Sale Gross Margin of 29.6%
- Net New Orders Increased 24% to 7,947 Homes with a Value of
$4.3 Billion
- Unit Backlog of 13,558 Homes with a Value of $8.2
Billion
- Company Repurchased $250 Million of Shares in the
Quarter
PulteGroup, Inc. (NYSE: PHM) announced today financial results
for its second quarter ended June 30, 2023. For the quarter, the
Company reported net income of $720 million, or $3.21 per share.
Reported net income for the quarter includes a $65 million pre-tax,
or $0.21 per share, insurance benefit recorded in the period. In
the prior year, the Company reported net income for the second
quarter of $652 million, or $2.73 per share.
“Our outstanding financial results reflect the benefits of our
operating model as we strategically align production of
build-to-order and quick-move-in homes with applicable demand
across our consumer groups,” said Ryan Marshall, President and
Chief Executive Officer of PulteGroup. “By remaining disciplined
and balanced in executing our business plan, we were able to
realize higher closings and prices in the period, along with
driving exceptional margins of 29.6% and a return on equity* of
32%.”
“Our net new orders increased 24% over last year, which reflects
our ability to help solve affordability challenges caused by
today’s higher mortgage rates and capitalize on the ongoing
strength in demand for new homes,” added Mr. Marshall. “While there
remains an extremely limited supply of existing homes, we have an
expanded community count and a much improved supply chain that has
PulteGroup well positioned to meet buyer demand going forward.”
Home sale revenues for the second quarter increased 8% over the
prior year to $4.1 billion. Higher revenues in the quarter were
driven by a 5% increase in closings to 7,518 homes, in combination
with a 3% increase in average sales price to $540,000.
The Company’s second quarter homebuilding gross margin of 29.6%
was down 170 basis points from the prior year, but represents a
sequential increase of 50 basis points from the first quarter of
2023. Reported second quarter SG&A expense of $315 million, or
7.8% of home sale revenues, includes the $65 million pre-tax
insurance benefit recorded in the period. Prior year SG&A
expense was $351 million, or 9.3% of home sale revenues.
Net new orders for the second quarter increased 24% over last
year to 7,947 homes. The dollar value of net new orders in the
second quarter was $4.3 billion, which is an increase of 9% over
the prior year period. For the second quarter, the Company operated
out of an average of 903 communities, which is an increase of 14%
over the second quarter of 2022.
At the end of the second quarter, the Company’s backlog totaled
13,558 homes with a value of $8.2 billion.
Second quarter pre-tax income for the Company's financial
services operations increased 16% over last year to $46 million.
Mortgage capture rate for the second quarter was 80%, up from 78%
last year.
The Company’s reported income tax expense for the second quarter
was $233 million, representing an effective tax rate of 24.4%.
The Company ended the second quarter with $1.8 billion of cash
and a debt-to-capital ratio of 17.3%. In the second quarter, the
Company repurchased 3.7 million of its shares for $250 million, or
an average price of $68.31 per share. In the first six months of
2023, the Company repurchased a total 6.4 million shares, or
approximately 3% of its outstanding shares, for $400 million, or
$62.28 per share.
A conference call discussing PulteGroup's second quarter 2023
results is scheduled for Tuesday, July 25, 2023, at 8:30 a.m.
Eastern Time. Interested investors can access the live webcast via
PulteGroup's corporate website at www.pultegroup.com.
* The Company's return on equity is calculated as net income for
the trailing twelve months divided by average shareholders' equity,
where average shareholders' equity is the sum of ending
shareholders' equity balances of the trailing five quarters divided
by five.
Forward-Looking Statements
This release includes “forward-looking statements.” These
statements are subject to a number of risks, uncertainties and
other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “plan,” “project,” “may,” “can,” “could,”
“might,” “should,” “will” and similar expressions identify
forward-looking statements, including statements related to any
potential impairment charges and the impacts or effects thereof,
expected operating and performing results, planned transactions,
planned objectives of management, future developments or conditions
in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future.
Such risks, uncertainties and other factors include, among other
things: interest rate changes and the availability of mortgage
financing; the impact of any changes to our strategy in responding
to the cyclical nature of the industry or deteriorations in
industry changes or downward changes in general economic or other
business conditions, including any changes regarding our land
positions and the levels of our land spend; economic changes
nationally or in our local markets, including inflation, deflation,
changes in consumer confidence and preferences and the state of the
market for homes in general; labor supply shortages and the cost of
labor; the availability and cost of land and other raw materials
used by us in our homebuilding operations; a decline in the value
of the land and home inventories we maintain and resulting possible
future writedowns of the carrying value of our real estate assets;
competition within the industries in which we operate; governmental
regulation directed at or affecting the housing market, the
homebuilding industry or construction activities, slow growth
initiatives and/or local building moratoria; the availability and
cost of insurance covering risks associated with our businesses,
including warranty and other legal or regulatory proceedings or
claims; damage from improper acts of persons over whom we do not
have control or attempts to impose liabilities or obligations of
third parties on us; weather related slowdowns; the impact of
climate change and related governmental regulation; adverse capital
and credit market conditions, which may affect our access to and
cost of capital; the insufficiency of our income tax provisions and
tax reserves, including as a result of changing laws or
interpretations; the potential that we do not realize our deferred
tax assets; our inability to sell mortgages into the secondary
market; uncertainty in the mortgage lending industry, including
revisions to underwriting standards and repurchase requirements
associated with the sale of mortgage loans, and related claims
against us; risks related to information technology failures or
data security issues; failure to retain key personnel; the
disruptions associated with the COVID-19 pandemic (or another
epidemic or pandemic or similar public threat or fear of such an
event), and the measures taken to address it; the effect of
cybersecurity incidents and threats; and other factors of national,
regional and global scale, including those of a political,
economic, business and competitive nature. See Item 1A – Risk
Factors in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 for a further discussion of these and other risks
and uncertainties applicable to our businesses. We undertake no
duty to update any forward-looking statement, whether as a result
of new information, future events or changes in our
expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one
of America’s largest homebuilding companies with operations in more
than 40 markets throughout the country. Through its brand portfolio
that includes Centex, Pulte Homes, Del Webb, DiVosta Homes,
American West and John Wieland Homes and Neighborhoods, the company
is one of the industry’s most versatile homebuilders able to meet
the needs of multiple buyer groups and respond to changing consumer
demand. PulteGroup’s purpose is building incredible places where
people can live their dreams.
For more information about PulteGroup, Inc. and PulteGroup
brands, go to pultegroup.com; pulte.com; centex.com; delwebb.com;
divosta.com; jwhomes.com; and americanwesthomes.com. Follow
PulteGroup, Inc. on Twitter: @PulteGroupNews.
PulteGroup, Inc.
Consolidated Statements of
Operations
($000's omitted, except per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenues:
Homebuilding
Home sale revenues
$
4,058,930
$
3,763,167
$
7,546,567
$
6,795,384
Land sale and other revenues
37,604
33,810
67,671
66,969
4,096,534
3,796,977
7,614,238
6,862,353
Financial Services
92,219
82,775
150,156
166,918
Total revenues
4,188,753
3,879,752
7,764,394
7,029,271
Homebuilding Cost of Revenues:
Home sale cost of revenues
(2,856,361
)
(2,584,922
)
(5,328,690
)
(4,727,900
)
Land sale and other cost of revenues
(32,494
)
(31,656
)
(57,461
)
(63,657
)
(2,888,855
)
(2,616,578
)
(5,386,151
)
(4,791,557
)
Financial Services expenses
(46,778
)
(43,847
)
(90,813
)
(87,333
)
Selling, general, and administrative
expenses
(314,637
)
(351,256
)
(651,156
)
(680,279
)
Equity income from unconsolidated
entities
944
723
3,456
1,944
Other income (expense), net
13,586
(4,221
)
15,405
(7,580
)
Income before income taxes
953,013
864,573
1,655,135
1,464,466
Income tax expense
(232,668
)
(212,138
)
(402,531
)
(357,308
)
Net income
$
720,345
$
652,435
$
1,252,604
$
1,107,158
Per share:
Basic earnings
$
3.23
$
2.74
$
5.58
$
4.56
Diluted earnings
$
3.21
$
2.73
$
5.55
$
4.54
Cash dividends declared
$
0.16
$
0.15
$
0.32
$
0.30
Number of shares used in calculation:
Basic
222,160
236,328
223,635
241,036
Effect of dilutive securities
1,232
1,318
1,031
1,193
Diluted
223,392
237,646
224,666
242,229
PulteGroup, Inc.
Condensed Consolidated Balance
Sheets
($000's omitted)
(Unaudited)
June 30,
2023
December 31,
2022
ASSETS
Cash and equivalents
$
1,728,713
$
1,053,104
Restricted cash
49,067
41,449
Total cash, cash equivalents, and
restricted cash
1,777,780
1,094,553
House and land inventory
11,335,048
11,326,017
Land held for sale
34,324
42,254
Residential mortgage loans
available-for-sale
432,481
677,207
Investments in unconsolidated entities
151,295
146,759
Other assets
1,295,539
1,291,572
Goodwill
68,930
68,930
Other intangible assets
61,583
66,875
Deferred tax assets
68,936
82,348
$
15,225,916
$
14,796,515
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities:
Accounts payable
$
543,419
$
565,975
Customer deposits
797,249
783,556
Deferred tax liabilities
295,438
215,446
Accrued and other liabilities
1,536,010
1,685,202
Financial Services debt
315,583
586,711
Notes payable
2,033,192
2,045,527
5,520,891
5,882,417
Shareholders' equity
9,705,025
8,914,098
$
15,225,916
$
14,796,515
PulteGroup, Inc.
Consolidated Statements of
Cash Flows
($000's omitted)
(Unaudited)
Six Months Ended
June 30,
2023
2022
Cash flows from operating
activities:
Net income
$
1,252,604
$
1,107,158
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income tax expense
93,389
20,823
Land-related charges
10,110
8,013
Depreciation and amortization
39,204
33,393
Equity income from unconsolidated
entities
(3,456
)
(1,944
)
Distributions of income from
unconsolidated entities
4,564
1,150
Share-based compensation expense
27,960
29,640
Other, net
(161
)
736
Increase (decrease) in cash due to:
Inventories
52,001
(1,683,129
)
Residential mortgage loans
available-for-sale
244,516
393,350
Other assets
(6,602
)
(87,569
)
Accounts payable, accrued and other
liabilities
(263,546
)
280,722
Net cash provided by operating
activities
1,450,583
102,343
Cash flows from investing
activities:
Capital expenditures
(45,076
)
(62,557
)
Investments in unconsolidated entities
(7,858
)
(50,480
)
Distributions of capital from
unconsolidated entities
2,216
3,010
Business acquisition
—
(10,400
)
Other investing activities, net
(3,278
)
(2,713
)
Net cash used in investing activities
(53,996
)
(123,140
)
Cash flows from financing
activities:
Repayments of notes payable
(17,305
)
(4,152
)
Borrowings under revolving credit
facility
—
110,000
Repayments under revolving credit
facility
—
(110,000
)
Financial Services repayments, net
(271,128
)
(183,307
)
Debt issuance costs
—
(11,167
)
Proceeds from liabilities related to
consolidated inventory not owned
91,354
—
Payments related to consolidated inventory
not owned
(33,577
)
—
Share repurchases
(400,000
)
(794,227
)
Cash paid for shares withheld for
taxes
(10,389
)
(13,614
)
Dividends paid
(72,315
)
(74,197
)
Net cash used in financing activities
(713,360
)
(1,080,664
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
683,227
(1,101,461
)
Cash, cash equivalents, and restricted
cash at beginning of period
1,094,553
1,833,565
Cash, cash equivalents, and restricted
cash at end of period
$
1,777,780
$
732,104
Supplemental Cash Flow
Information:
Interest paid (capitalized), net
$
2,757
$
230
Income taxes paid (refunded), net
$
380,527
$
290,571
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
HOMEBUILDING:
Home sale revenues
$ 4,058,930
$ 3,763,167
$ 7,546,567
$ 6,795,384
Land sale and other revenues
37,604
33,810
67,671
66,969
Total Homebuilding revenues
4,096,534
3,796,977
7,614,238
6,862,353
Home sale cost of revenues
(2,856,361
)
(2,584,922
)
(5,328,690
)
(4,727,900
)
Land sale and other cost of revenues
(32,494
)
(31,656
)
(57,461
)
(63,657
)
Selling, general, and administrative
expenses ("SG&A")
(314,637
)
(351,256
)
(651,156
)
(680,279
)
Equity income from unconsolidated
entities
(110
)
(427
)
2,402
794
Other income (expense), net
13,586
(4,218
)
15,405
(7,513
)
Income before income taxes
$ 906,518
$ 824,498
$ 1,594,738
$ 1,383,798
FINANCIAL SERVICES:
Income before income taxes
$ 46,495
$ 40,075
$ 60,397
$ 80,668
CONSOLIDATED:
Income before income taxes
$ 953,013
$ 864,573
$ 1,655,135
$ 1,464,466
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Home sale revenues
$
4,058,930
$
3,763,167
$
7,546,567
$
6,795,384
Closings - units
Northeast
315
386
652
648
Southeast
1,405
1,085
2,573
2,111
Florida
2,067
1,779
3,819
3,212
Midwest
918
1,131
1,675
2,075
Texas
1,511
1,483
2,819
2,693
West
1,302
1,313
2,374
2,477
7,518
7,177
13,912
13,216
Average selling price
$
540
$
524
$
542
$
514
Net new orders - units
Northeast
400
384
785
809
Southeast
1,556
1,304
2,903
2,635
Florida
1,910
1,554
3,788
3,427
Midwest
1,253
842
2,336
2,005
Texas
1,388
1,225
2,812
2,739
West
1,440
1,109
2,677
2,774
7,947
6,418
15,301
14,389
Net new orders - dollars
$
4,271,008
$
3,903,999
$
8,061,001
$
8,635,271
Unit backlog
Northeast
607
949
Southeast
2,236
3,000
Florida
4,610
5,645
Midwest
2,011
2,618
Texas
1,782
3,145
West
2,312
3,819
13,558
19,176
Dollars in backlog
$
8,188,502
$
11,614,167
PulteGroup, Inc.
Segment Data,
continued
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
MORTGAGE ORIGINATIONS:
Origination volume
4,539
4,568
8,408
8,625
Origination principal
$
1,790,977
$
1,754,715
$
3,307,427
$
3,294,613
Capture rate
79.7
%
78.2
%
79.1
%
79.5
%
Supplemental Data
($000's omitted)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Interest in inventory, beginning of
period
$
141,271
$
158,670
$
137,262
$
160,756
Interest capitalized
31,927
31,338
63,729
62,921
Interest expensed
(31,204
)
(38,454
)
(58,997
)
(72,123
)
Interest in inventory, end of period
$
141,994
$
151,554
$
141,994
$
151,554
PulteGroup, Inc. Reconciliation of
Non-GAAP Financial Measures
This report contains information about our debt-to-capital
ratios. These measures could be considered non-GAAP financial
measures under the SEC's rules and should be considered in addition
to, rather than as a substitute for, comparable GAAP financial
measures. We calculate total net debt by subtracting total cash,
cash equivalents, and restricted cash from notes payable to present
the amount of assets needed to satisfy the debt. We use the
debt-to-capital and net debt-to-capital ratios as indicators of our
overall leverage and believe they are useful financial measures in
understanding the leverage employed in our operations. We believe
that these measures provide investors relevant and useful
information for evaluating the comparability of financial
information presented and comparing our profitability and liquidity
to other companies in the homebuilding industry. Although other
companies in the homebuilding industry report similar information,
the methods used may differ. We urge investors to understand the
methods used by other companies in the homebuilding industry to
calculate these measures and any adjustments thereto before
comparing our measures to those of such other companies.
The following table sets forth a reconciliation of the
debt-to-capital ratios ($000's omitted):
Debt-to-Capital Ratios
June 30,
2023
December 31,
2022
Notes payable
$
2,033,192
$
2,045,527
Shareholders' equity
9,705,025
8,914,098
Total capital
$
11,738,217
$
10,959,625
Debt-to-capital ratio
17.3
%
18.7
%
Notes payable
$
2,033,192
$
2,045,527
Less: Total cash, cash equivalents, and
restricted cash
(1,777,780
)
(1,094,553
)
Total net debt
$
255,412
$
950,974
Shareholders' equity
9,705,025
8,914,098
Total net capital
$
9,960,437
$
9,865,072
Net debt-to-capital ratio
2.6
%
9.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230725177858/en/
Investors: Jim Zeumer (404) 978-6434
jim.zeumer@pultegroup.com
PulteGroup (NYSE:PHM)
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