PulteGroup Reports Second Quarter 2017 Financial Results

  • Reported Net Income of $0.32 Per Share Reflects Land and Warranty Charges, Partially Offset by an Insurance Reserve Reversal and Lower Tax Rate
  • Adjusted Net Income of $0.47 Per Share Increased 27% Over Prior Year Q2 Adjusted Net Income of $0.37 Per Share
  • Net New Orders Increased 12% to 6,395 Homes; Value of Net New Orders Increased 23% to $2.6 Billion
  • Home Sale Revenues Increased 12% to $2.0 Billion
  • Backlog Increased 10% to 10,674 Homes; Backlog Value Increased 19% to $4.5 Billion
  • Company Repurchased 12.8 Million Shares of Stock During the Quarter for $300 Million
ATLANTA - July 25, 2017 - PulteGroup, Inc. announced today financial results for its second quarter ended June 30, 2017.  For the quarter, the Company’s reported net income was $101 million, or $0.32 per share. Adjusted net income for the period was $148 million, or $0.47 per share.  Adjustments to the Company’s reported results include a pretax charge of $121 million associated with the Company’s previously announced decision to dispose of select non-core and underutilized land assets, a net pretax benefit of $8 million relating to warranty and construction defect reserve adjustments, and $24 million of net tax benefits recorded during the period.

Reported net income for the prior year second quarter was $118 million, or $0.34 per share.   Adjusted net income for the prior year quarter was $127 million, or $0.37 per share, after excluding the impact of land and corporate office relocation charges in the period. 

“U.S. housing demand continues to benefit from positive market dynamics including an improving economy and job market, high consumer confidence, low interest rates and a generally limited supply of homes across the country,” said Ryan Marshall, President and Chief Executive Officer of PulteGroup.  “Given these strong market supports, we believe housing demand can continue to move higher over the coming quarters.”

“Within this market environment, PulteGroup is successfully executing against its business strategies as we focus on intelligently growing our business while delivering high returns,” added Mr. Marshall.  “Consistent with this focus, our second quarter results show orders up 12%, backlog value up 19% and adjusted earnings per share up 27%, while ROE improved 140 basis points to 12.8%.”  
Second Quarter Results
Home sale revenues for the second quarter increased 12% over the prior year to $2.0 billion.  Higher revenues for the period were driven by a 6% increase in deliveries to 5,044 homes, combined with a 6% increase in average sales price to $390,000.
Reported gross margin for the second quarter was 21.1%, including the impact of land-related and warranty charges taken in the period.  Exclusive of these charges, the Company’s adjusted gross margin for the quarter was 23.4%.   Reported SG&A expense for the second quarter was $216 million, or 11.0% of home sale revenues, which includes a $20 million benefit relating to an insurance reserve adjustment taken in the period.  Adjusted SG&A expense for the quarter was $236 million, or 12.0% of home sale revenues.  Reported SG&A expense for the prior year was $256 million, or 14.6% of home sale revenues. 

Net new orders for the second quarter increased 12% over the prior year to 6,395 homes.  The dollar value of net new orders gained 23% to $2.6 billion.  For the quarter, the Company operated out of 803 communities.

PulteGroup’s unit backlog increased 10% over the prior year to 10,674 homes.  The value of homes in backlog increased 19% to $4.5 billion.  The average sales price of homes in backlog is $418,000, which is up 8% over the average sales price in backlog in the second quarter of last year and up 7% from the average sales price of homes delivered in the second quarter of 2017.

Pretax income for the Company's financial services operations increased 11% for the quarter to $19 million, as the operations benefitted from higher homebuilder closing volumes and an increase in the average loan size.  Mortgage capture rate for the quarter was 79%, compared with 81% in the prior year.

For the quarter, the Company reported $22 million of income tax expense, representing an effective tax rate of 17.8%.  The Company’s tax rate for the quarter included the net benefit of $24 million resulting from the favorable resolution of certain tax matters.  Excluding this benefit, the Company’s effective tax rate would have been approximately 37%.

During the quarter, PulteGroup repurchased 12.8 million common shares for $300 million, or an average price of $23.42 per share.   

A conference call discussing PulteGroup's second quarter 2017 results is scheduled for Tuesday, July 25, 2017, at 8:30 a.m. Eastern Time.  Interested investors can access the live webcast via PulteGroup's corporate website at

Forward-Looking Statements
This press 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 the impairment charge with respect to certain land parcels 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; competition within the industries in which we operate; the availability and cost of land and other raw materials used by us in our homebuilding operations; the impact of any changes to our strategy in responding to the cyclical nature of the industry, including any changes regarding our land positions and the levels of our land spend; the availability and cost of insurance covering risks associated with our businesses; shortages and the cost of labor; weather related slowdowns; slow growth initiatives and/or local building moratoria; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans; the interpretation of or changes to tax, labor and environmental laws; 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; legal or regulatory proceedings or claims; our ability to generate sufficient cash flow in order to successfully implement our capital allocation priorities; required accounting changes; terrorist acts and other acts of war; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See PulteGroup's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and other public filings with the Securities and Exchange Commission (the “SEC”) 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 approximately 50 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes 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 conducts extensive research to provide homebuyers with innovative solutions and consumer inspired homes and communities to make lives better.
For more information about PulteGroup, Inc. and PulteGroup brands, go to;;;; and
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