Home Construction Company PulteGroup's Q2 Revenue and Earnings Soar Despite Rising Interest Rates: Details

PulteGroup, Inc. PHM shares are trading higher after the company reported second-quarter FY24 results.

Revenue stood at $4.60 billion, beating the consensus of $4.491 billion.

Reported home sale revenues rose 10% Y/Y to $4.4 billion, with higher revenues reflecting an 8% Y/Y increase in closings to 8,097 homes and a 2% Y/Y rise in average sales price to $549,000.

The gross margin for home sales stood at 29.9%, increasing by 30 basis points Y/Y, in the quarter.

Net new orders fell to 7,649 from 7,947 homes last year. However, the dollar value of net new orders rose 2% year-over-year to $4.4 billion in the second quarter.

GAAP EPS of 3.83 beat the consensus of $3.26.

At the end of the second quarter, the company’s backlog was 12,982 homes, valued at $8.1 billion. The company ended the year with $1.4 billion of cash and a debt-to-capital ratio of 12.8%.

During the quarter, the company repurchased 2.8 million of its common shares for $314 million, or an average price of $113.79 per share.

Ryan Marshall, PulteGroup President and CEO, said, “While interest rate movements can impact short-term homebuying demand, long-term market dynamics continue to benefit from a structural shortage of homes caused by years of underbuilding.”

“As demonstrated by our 27.1% return on equity for the past 12 months, we continue to successfully navigate these conditions by actively managing sales price, pace and starts on a community-by-community basis with the goal of realizing high returns on invested capital and equity over time.”

Yesterday, the company disclosed that Bob O’Shaughnessy, Executive Vice President, and Chief Financial Officer, plans to retire at the end of 2025.

PulteGroup has appointed Jim Ossowski, currently Senior Vice President of Finance, as the replacement.

Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ITB and Invesco Building & Construction ETF PKB.

Price Action: PHM shares were up 2.61% at $128.92 premarket at last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Midjourney