Pulte Homes Posts wider Loss in Q2

Pulte Homes Inc posted a wider loss in Q2 compared to last year, as revenue dropped because of fewer home closings and lower average selling prices.


The Bloomfield Hills, Michigan-based company reported a net loss for the second quarter of $189.5 million or $0.74 per share, compared to a net loss of $158.4 million or $0.63 per share for the year-ago quarter.
On average, 15 analysts polled by Thomson Reuters expected the company to report a loss of $0.57 per share for the second quarter.
The latest quarter net loss includes pre-tax charges of $119.3 million, related to inventory impairments and other land-related charges, compared to charges of $220.1 million in the year-ago quarter. The year-ago quarter results also reflect a tax benefit of $56.8 million, mainly due to an adjustment in the Company's deferred income tax assets.
Total revenue for the second quarter fell 58% to $678.58 million from $1.62 billion in the same quarter last year. Eleven analysts had a consensus revenue estimate of $647.07 million for the second quarter.
Homebuilding revenue for the quarter fell 58% to 657.9 million from $1.6 billion a year ago, reflecting a 54% drop in closings to 2,500 homes, combined with a 9% decrease in average selling price to $261,000.
Net new home orders for the second quarter were 3,367 homes, valued at $862 million, compared to 5,133 homes, valued at $1.4 billion in the second quarter of last year.
Pulte Homes ended the second quarter with a backlog of 3,916 homes, valued at $1.1 billion, compared to 8,254 homes, valued at $2.4 billion a year ago.
The company's inventory of unsold homes was 1,815 units at the end of the second quarter, down 42% from a year earlier and down 24% from the first quarter.
"Pulte's second quarter results reflect an industry under pressure as a weak economy, rising unemployment and soft consumer confidence continue to depress homebuying demand," said Richard Dugas, Jr., President and CEO of Pulte Homes.
However, Dugas added that sequentially, the company has seen some positive signs as net new orders increased 11 percent on 9% fewer communities, cancellation rates were stable and its unit backlog increased by 28%, or almost 900 homes.
The U.S. Commerce Department said on July 27 that new home sales jumped 11% to an annual rate of 384,000 in June from the revised May rate of 346,000. Economists had expected sales to rise to 352,000 from the 342,000 originally reported for the previous month.