PulteGroup (PHM) Up 1.7% Since Last Earnings Report: Can It Continue?

Core Viewpoint - PulteGroup reported strong first-quarter 2024 earnings and revenues, exceeding consensus estimates, driven by favorable demand conditions and a balanced operating model [2][3]. Financial Performance - Adjusted earnings per share were $2.87, surpassing the consensus estimate of $2.36 by 21.6% and increasing 22.1% from $2.35 a year ago [3]. - Total revenues reached $3.95 billion, beating the consensus mark of $3.59 billion by 10.1% and increasing 10.4% from the previous year's $3.58 billion [3]. Segment Performance - Homebuilding segment revenues increased 9.6% year over year to $3.86 billion, with home sale revenues of $3.82 billion up 9.5% due to solid homes closed [4]. - The number of homes closed rose 11% to 7,095 units, while the average selling price of homes delivered was $538,000, down 1.3% year over year [4]. - New home orders increased 14% year over year to 8,379 units, with the value of new orders rising 24% to $4.7 billion [4]. Backlog and Margins - The backlog of orders was 13,430 units, up 2.3% year over year, with potential housing revenues from the backlog increasing 2.8% to $8.2 billion [5]. - Home sales gross margin improved by 50 basis points to 29.6%, supported by strong homebuyer demand [5]. Financial Services - Revenues from the Financial Services segment surged 59.4% year over year to $92.4 million, with pretax income rising to $41 million from $14 million a year ago [5]. Cash Position and Share Repurchase - At the end of Q1, cash and cash equivalents were $1.77 billion, down from $1.85 billion at the end of 2023 [6]. - The company repurchased 2.3 million shares for $246 million at an average price of $106.73 per share [6]. Guidance - For Q2, PulteGroup expects to close between 7,800 and 8,200 homes, raising its full-year closings guidance to nearly 31,000 homes, reflecting an 8% year-over-year increase [7]. - Gross margin is projected to be 29.2% for Q2, with expectations of 29% for Q3 and Q4 [8]. Estimates and Rankings - Consensus estimates have trended upward, with a 6.45% shift due to recent performance [8]. - PulteGroup holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [10].