PulteGroup Stock Rises on Q1 Earnings & Revenue Beat

Core Insights - PulteGroup Inc. reported better-than-expected first-quarter 2024 results, with adjusted earnings of $2.57 per share and total revenues of $3.89 billion, surpassing Zacks Consensus Estimates [1][4] - The company's performance is attributed to its diversified operations and strategic focus on balancing sales price and pace to maintain strong returns [1] Financial Performance - Adjusted earnings per share of $2.57 exceeded the consensus estimate of $2.47 by 4.1%, although it decreased from $2.87 in the year-ago quarter [4] - Total revenues of $3.89 billion surpassed the consensus mark of $3.86 billion but decreased 1.4% from $3.95 billion a year ago [4] - Homebuilding segment revenues fell 1.4% year over year to $3.8 billion, while home sale revenues decreased 1.8% to $3.75 billion [5] - The number of homes closed dropped 7% to 6,583 units, with an average selling price (ASP) of $570,000, up 6% year over year [6] Market Dynamics - Declining interest rates have stimulated buyer interest, but high home prices and stretched monthly payments continue to challenge affordability [2] - Net new home orders declined 7.3% year over year to 7,765 units, with the value of new orders down 4.7% to $4.48 billion, largely due to affordability pressures [7] - The backlog of orders decreased to 11,335 units from 13,430 units a year ago, with potential housing revenues from the backlog down to $7.22 billion [8] Segment Analysis - Financial Services segment revenues dropped 1.7% year over year to $90.8 million, with pretax income declining to $36 million from $41 million due to lower closing volumes [9] - Home sales gross margin decreased by 210 basis points to 27.5%, while SG&A expenses as a percentage of home sales revenues increased by 110 basis points to 10.5% [8] Cash Flow and Shareholder Returns - At the end of the first quarter, cash, cash equivalents, and restricted cash were $1.28 billion, down from $1.65 billion at the end of 2024 [10] - Net cash provided by operating activities was $134.2 million, down from $239.8 million in the prior-year period [10] - The company repurchased 2.8 million common shares for $300 million at an average price of $108.03 per share [11]