PulteGroup Reports Second Quarter 2019 Financial Results

  • Net Income of $0.86 Per Share
  • Net New Orders Increased 7% to 6,792 Homes
  • Value of Net New Orders Increased 7% to $2.9 Billion
  • Home Sale Revenues of $2.4 Billion
  • Homebuilding Gross Margin of 23.1% and Operating Margin of 12.3%
  • Backlog of 11,793 Homes Valued at $5.1 Billion
  • Company Retired $274 Million of Senior Notes and Repurchased $83 Million of Stock During the Quarter
ATLANTA - July 23, 2019 - PulteGroup, Inc. (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2019.  For the quarter, the Company’s reported net income was $241 million, or $0.86 per share.  Prior year reported net income for the second quarter was $324 million, or $1.12 per share, which included $38 million of pretax benefit associated with insurance adjustments, $26 million of pretax land sale gains, and $17 million of net tax benefits.  Adjusted net income for the prior year period was $259 million, or $0.89 per share.

“PulteGroup’s second quarter results demonstrate our ongoing success in running a highly profitable, high returning business, with a clearly articulated approach to capital allocation,” said Ryan Marshall, President and Chief Executive Officer of PulteGroup.  “Consistent with our stated objectives, our continued strong operating performance allowed us to invest over $850 million in total land spend in the quarter, while also using almost $400 million of available cash for dividends, share repurchases and debt reduction.”

“As reflected in our results, consumer activity remains high as homebuyers are returning to the market following a period of softer demand in the back half of 2018,” added Mr. Marshall.  “Given the low interest rate environment, in combination with supportive economic, employment and demographic trends, we are optimistic about housing demand as we advance through the remainder of 2019.”

Second Quarter Results

Home sale revenues for the second quarter decreased 2% from the prior year to $2.4 billion.  Lower revenues for the quarter reflect a 1% increase in average sales price to $430,000, offset by a 3% decrease in closings to 5,589 homes.

Gross margin for the second quarter was 23.1%, compared with 24.0% in the second quarter of 2018.  SG&A expense for the quarter was $259 million, or 10.8% of home sale revenues.  Prior year reported SG&A expense was $226 million, or 9.2% of home sale revenues, inclusive of the $38 million benefit relating to insurance adjustments recorded in the period.  Adjusted SG&A expense for the prior year period was $264 million, or 10.8% of home sale revenues.      

In the second quarter, the Company recorded land sales gains of $1.4 million compared with prior year gains of $27.3 million.  Second quarter 2018 land sale gains included $26 million relating to the sale of two large land parcels completed in the period. 

Net new orders for the second quarter increased 7% from the prior year to 6,792 homes.  The dollar value of net new orders also increased 7% over the prior year to $2.9 billion.  For the quarter, the Company operated out of 877 communities.

Unit backlog at the end of the quarter was 11,793 homes, which is comparable with prior year backlog of 11,845 homes.  The average sales price of homes in backlog was $433,000, which is down 1% from last year’s average sales price in backlog of $439,000.  The total value of homes in backlog was $5.1 billion. 

Second quarter pretax income for the Company's financial services operations increased 21% over the prior year to $25 million.  Financial services benefitted from higher closing volumes, as mortgage capture rate increased to 81% from 76% in the prior year, as well as higher net margins on mortgage originations. 

For the quarter, the Company reported $80 million of income tax expense, representing an effective tax rate of 24.9%.  Second quarter tax expense in the prior year was $85 million, or an effective tax rate of 20.8%, which included the net benefit of $17 million of tax adjustments recorded in the period.  The adjusted tax rate for the prior year period was 25.0%.

During the quarter, PulteGroup repurchased 2.6 million of common shares for $83 million, or an average price of $31.82 per share.  In the second quarter, the Company also used available cash to retire $274 million of its 4.250% Senior Notes due 2021.  The Company incurred a pretax charge of $4.8 million in the quarter associated with the early redemption of these notes.

A conference call discussing PulteGroup's second quarter 2019 results is scheduled for Tuesday, July 23, 2019, 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 any impairment charge 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 which could have a greater impact on our effective tax rate or the value of our deferred tax assets than we anticipate; 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and the Company’s other public filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our businesses. The Company undertakes no duty to update any forward-looking statement, whether as a result of new information, future events or changes in PulteGroup’s 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 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  Follow PulteGroup, Inc. on Twitter: @PulteGroupNews.
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