PulteGroup Enjoys Q4 Growth With $1.5B Share Buyback Program, Despite Revenue Drop

PulteGroup Inc PHM reported a fourth-quarter fiscal 2023 total revenue decline of 15.5% year-over-year to $4.29 billion, missing the consensus of $4.48 billion.

EPS declined to $3.28 from $3.85 in the same quarter last year, beating the consensus of $3.22. Reported Home sale revenues fell 16% Y/Y to $4.165 billion, reflecting closings of 7,615 homes at an average sales price of $547,000, and Financial Services revenue was $93.88 million (+30.2% Y/Y).

Q4’s home sale gross margin was 28.9%, compared with 29.4% in the prior year. Q4 Net new orders increased 57% Y/Y to 6,214 homes, while the dollar value of these orders increased 56% to $3.4 billion. Cancelations were 9% of starting backlog, down from 11% in the comparable prior year period.

PulteGroup quarter-end backlog was 12,146 homes valued at $7.3 billion, reflecting both an improved selling environment and a decreased cancelation. PulteGroup ended the year with $1.8 billion of cash and a debt-to-capital ratio of 15.9%. During the quarter, the company repurchased 3.6 million of its common shares for $300 million, or an average price of $83.03 per share.

PulteGroup announced a $1.5 billion increase to its share repurchase authorization, bringing its total share repurchase authorization to $1.8 billion.

“As the fourth quarter progressed, we experienced a significant increase in buyer activity as interest rates moved lower, resulting in December being the highest sales month of the quarter. With expectations for interest rates to remain lower in 2024, we are optimistic that improved affordability dynamics will continue attracting buyers into the market, commented Ryan Marshall, PulteGroup President and CEO.

Price Action: PHM shares are trading higher by 2.29% at $108.49 on the last check Tuesday.