PulteGroup Inc. said: On Tuesday, it said it saw a pick-up in home-buying activity around the end of 2023 and expected a significant increase in 2024, but the homebuilder's stock took a hit as fourth-quarter revenue fell below expectations amid lower home closings and prices.
The company also reported quarterly earnings that beat expectations, and announced a $1.5 billion increase in its stock buyback program, which now represents nearly 8% of Pulte's market capitalization.
PHPM stock,
It was down 0.9% before the open, retreating from an earlier pre-market gain of as much as 0.9%.
“As the fourth quarter progressed, we saw a significant increase in buyer activity as interest rates declined, resulting in December being the highest sales month of the quarter,” CEO Ryan Marshall said.
“After several years of variable macroeconomic activity, projections indicate that 2024 could be a year of increased home buying demand given the strong labor market, low interest rates and limited inventory of existing homes,” Marshall added.
Net income fell to $711 million, or $3.28 per share, from $882.2 million, or $3.85 per share, in the same period last year. That beat the FactSet consensus for EPS of $3.21.
Revenue fell 15.5% to $4.29 billion, beating the FactSet consensus of $4.47 billion.
The number of homes closed fell 13.9% to 7,615, below the FactSet consensus of 8,026, and the median sales price of closed homes fell 2.5%, to $574,000 from $561,000.
Meanwhile, net new orders jumped 57% to 6,214 homes, exceeding expectations of 5,584 homes, amid an improving selling environment and lower cancellations.
Separately, the company said it spent $300 million to buy back 3.6 million of its common shares during the fourth quarter, and spent $1 billion to buy back 13.8 million shares in 2023.
Pulte also said it has enhanced its share repurchase program by $1.5 billion, bringing its total repurchase authorization to $1.8 billion. This represents 7.9% of the company's market value of $22.87 billion as of Monday's close.
“This latest authorization reflects our expectations for continued strong cash flow from operations and our long-term commitment to returning excess cash to our shareholders,” said CEO Marshall.
Pulte stock is up 46.8% over the past three months through Monday, while the iShares US Home Construction ETF ITB is up 39% and the S&P 500 SPX has advanced 18.3%.
