BLOOMFIELD HILLS, Mich. -- Rising orders for new homes and rising prices hurtled PulteGroup back into a profitable third quarter, its best since before the real estate market crashed.
PulteGroup, free of a hefty impairment charge it recorded last year, breezed past Wall Street expectations and the average selling price climbed 6 percent to $279,000.
New orders climbed 27 percent to 4,544 homes. Backlog, which represents future potential revenue, increased 49 percent to 7,686 homes. The homes are valued at a total of $2.2 billion, which PulteGroup says is the highest level since 2008.
The housing market is starting to build momentum, with many within the industry seeing a slow recovery take hold. Homebuilders have been putting up better sales numbers, thanks in part to record low rates for mortgages.
For the three months ended Sept. 30, PulteGroup Inc. earned $116.6 million, or 30 cents per share. That compares with a loss of $129.3 million, or 34 cents per share, a year earlier.
Analysts forecast earnings of 19 cents per share, according to a FactSet survey.
The homebuilder said Thursday that the current quarter's results included a tax benefit of 3 cents per share. The prior-year period included a goodwill impairment charge of 63 cents per share.
Chairman and CEO Richard Dugas Jr. said that demand for homes is on the rise. The company reported a 27 percent increase in year-over-year signups.
While still cautious about the global economy, Dugas believes that rising rents, rock-bottom interest rates and the limited housing supply will bring better time for homebuilders.
Revenue rose 14 percent to $1.3 billion from $1.14 billion, just shy of most analyst expectations.
PulteGroup also announced that it started a tender offer for up to $1 billion outstanding senior notes. The Bloomfield Hills, Mich. company plans to fund the offer with available cash.