Pulte Shares Hit 3-Month High on Liquidity Boost
Shares of Pulte Homes surged to a 3-month high Thursday, as Wall Street cheered the third-largest homebuilder's improved liquidity position.
The shares were up more than 14 percent, and hit a high of $15.35 in intraday trading, the highest price seen since Oct. 31. The stock turned sharply higher after opening the session down as much as 5.5 percent.
Pulte reported late Wednesday that it ended 2007 with $1.1 billion in cash, up about $900 million from the third quarter, and above its target of $1 billion. Pulte said it targets a cash position of $2 billion to $2.2 billion at the end of 2008, with no outstandings on its revolving credit facility.
Banc of America Analyst Daniel Oppenheim reiterated his neutral rating, but raised his price target on the stock to $13 from $9.50, based on Pulte's improved liquidity position. He also narrowed his 2008 loss estimate to $2.40 a share from $2.90 a share.
Wider Loss in Fourth Quarter
Pultesaid on Wednesday its quarterly net loss widened sharply as a deteriorating housing market led to charges related to the lower value of land and inventory and a tax-loss benefit.
"The challenging market conditions that plagued the homebuilding industry for the first nine months of 2007 worsened in the fourth quarter," Richard Dugas Jr., Pulte's chief executive, said in a statement.
The fourth-quarter net loss increased to $874.7 million, or $3.46 per share, from $8.4 million, or 3 cents per share in the year-earlier quarter.
The U.S. housing market has been in a tailspin for more than two years, with top builders cutting prices and seeing orders dwindle.
Last year, builders slashed prices by the most since 1970 as sales of new U.S. single-family homes plummeted a record 26 percent, the U.S. Commerce Department reported Monday.
Sales in December alone fell 4.7 percent to an annual rate of 604,000, the slowest pace since 1995.
The latest Pulte results included a non-cash charge of $622 million, or $2.46 per share, to eliminate a tax loss-related asset on its balance sheet.
It also recorded charges of $543.3 million, or $1.28 per share, related to lower values of land, inventory and goodwill.
The loss from continuing operations was $893.3 million, or $3.54 per share, compared with a loss of $8.3 million, or 3 cents per share, for the prior year fourth quarter.
- Reuters contributed to this report.