PulteGroup Loss Widens on Hefty Charges
PulteGroup's fourth-quarter loss widened, as the homebuilder's results were dragged down by hefty charges and a decline in closings and new orders.
But the Bloomfield Hills, Mich. company said Friday that the housing market is showing signs of stabilizing, with encouraging January buyer traffic and sales trends.
In pre-market trading, PulteGroup shares rose 3 percent.
PulteGroup lost $165.4 million, or 44 cents per share, for the period ended Dec. 31. That compares with a loss of $116.9 million, or 31 cents a share, a year earlier.
The quarter included $196 million in land-related charges and costs related to its restructuring, paying down debt and other financing amendments completed in the quarter.
Analysts surveyed by FactSet, whose estimates usually remove one-time items, expected a loss of 9 cents a share.
Revenue dropped 32 percent to $1.19 billion from $1.73 billion, but still surpassed Wall Street's $1.13 billion.
Closings dropped 29 percent to 4,405 homes in the quarter, while net new orders fell 19 percent to 3,044 homes. The average selling price edged up 2 percent to $262,000.
PulteGroup's backlog fell to 3,984 homes from 5,931 homes.
In recent weeks, KB Home, Lennar , D.R. Horton and Standard Pacific all reported sharp drops in home deliveries and contracts for new homes during their latest quarters.
Meritage Homes bucked that trend, reporting this week a 15 percent jump in new home orders. Still, its home deliveries sank 30 percent.
Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.
PulteGroup CEO Richard J. Dugas Jr. said in a statement that the U.S. housing market does appear to be stabilizing, but at historically low levels. "Businesses are once again adding jobs, which directly stimulates buying and, in turn, consumer confidence, both of which are critical to ultimately raising demand for new homes," he said.
Dugas said the homebuilder is waiting to see if the encouraging trends of January continue through the selling season and year.
For all of 2010, PulteGroup's loss narrowed to $1.1 billion, or $2.90 per share, compared with a loss of $1.18 billion, or $3.94 per share, in the previous year.
The company said its 2010 earnings per share results were based on 379 million shares outstanding, higher than the year-earlier amount as additional shares were issued for the 2009 acquisition of Centex Corp.
Full-year revenue improved to $4.57 billion from $4.08 billion.
PulteGroup operates in 29 states and the District of Columbia. Its Del Webb brand is the nation's largest builder of communities for adults age 55 and over.