PulteGroup Reports Second Quarter 2024 Financial Results

  • Earnings Increased 19% to $3.83 Per Share
  • Home Sale Revenues Increased 10% to $4.4 Billion
  • Closings Increased 8% to 8,097 Homes; Average Sales Price Increased 2% to $549,000
  • Home Sale Gross Margin Increased 30 Basis Points to 29.9%
  • Net New Orders Totaled 7,649 Homes with a Value of $4.4 Billion
  • Unit Backlog of 12,982 Homes with a Value of $8.1 Billion
  • Repurchased $314 Million of Common Shares and $300 Million of Senior Notes in the Quarter

PulteGroup, Inc. (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2024. For the quarter, the Company reported net income of $809 million, or $3.83 per share. Reported net income for the quarter includes a $52 million pre-tax, or $0.19 per share, insurance benefit recorded in the period, and a $13 million, or $0.06 per share, benefit related to the favorable resolution of certain state tax matters. Prior year reported net income of $720 million, or $3.21 per share, included a $65 million pre-tax, or $0.21 per share, insurance benefit recorded in the period.

“PulteGroup’s balanced operating model continues to deliver outstanding financial results as increases in closings, average sales price and gross margin were key drivers of the 19% increase in our earnings to $3.83 per share,” said Ryan Marshall, President and Chief Executive Officer of PulteGroup. “The resulting strong cash flows are providing us with tremendous flexibility as we continued to intelligently allocate capital in the quarter to invest in our business growth, while returning funds to shareholders and further strengthening our overall capital structure.

“While interest rate movements can impact short-term homebuying demand, long-term market dynamics continue to benefit from a structural shortage of homes caused by years of underbuilding,” added Mr. Marshall. “As demonstrated by our 27.1% return on equity* for the past 12 months, we continue to successfully navigate these conditions by actively managing sales price, pace and starts on a community-by-community basis with the goal of realizing high returns on invested capital and equity over time.”

Home sale revenues for the second quarter increased 10% over the prior year to $4.4 billion. Higher revenues in the quarter were driven by an 8% increase in closings to 8,097 homes, combined with a 2% increase in average sales price to $549,000.

The Company reported second quarter homebuilding gross margins of 29.9%, which is an increase of 30 basis points over both last year and the first quarter of 2024. The Company’s reported second quarter SG&A expense of $361 million, or 8.1% of home sale revenues, includes the $52 million pre-tax insurance benefit recorded in the quarter. Prior year reported SG&A expense of $315 million, or 7.8% of home sale revenues, includes a $65 million pre-tax insurance benefit recorded in the second quarter of 2023.

In the second quarter, the Company reported net new orders of 7,649, compared with 7,947 homes in the comparable prior year period. The dollar value of net new orders in the second quarter increased 2% over the prior year to $4.4 billion. The Company operated out of an average of 934 communities in the period, which is an increase of 3% over the second quarter of 2023.

At the end of the second quarter, the Company’s backlog was 12,982 homes with a value of $8.1 billion.

The Company's financial services operations reported second quarter pre-tax income of $63 million, compared with prior year pre-tax income of $46 million. The 36% increase in pre-tax income was driven by gains across all business lines within financial services: mortgage, title and insurance. Mortgage capture rate for the second quarter was 86%, up from 80% last year.

The Company’s reported income tax expense for the second quarter was $239 million, representing an effective tax rate of 22.8%. The Company’s effective tax rate is inclusive of the $13 million benefit related to the favorable resolution of certain state tax matters realized in the quarter.

In the second quarter, the Company repurchased 2.8 million of its outstanding common shares for $314 million, or an average price of $113.79 per share. The Company also completed a tender offer in the period for $300 million of its outstanding senior notes, lowering its quarter-end outstanding notes payable to $1.7 billion. Inclusive of these transactions, the Company ended the second quarter with $1.4 billion of cash and a debt-to-capital ratio of 12.8%.

A conference call discussing PulteGroup's second quarter 2024 results is scheduled for Tuesday, July 23, 2024, at 8:30 a.m. Eastern Time. Interested investors can access the live webcast via PulteGroup's corporate website at www.pultegroup.com.

* The Company's return on equity is calculated as net income for the trailing twelve months divided by average shareholders' equity, where average shareholders' equity is the sum of ending shareholders' equity balances of the trailing five quarters divided by five.

Forward-Looking Statements

This release includes “forward-looking statements.” These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “project,” “may,” “can,” “could,” “might,” “should,” “will” and similar expressions identify forward-looking statements, including statements related to any potential impairment charges and the impacts or effects thereof, expected operating and performing results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.

Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; the impact of any changes to our strategy in responding to the cyclical nature of the industry or deteriorations in industry changes or downward changes in general economic or other business conditions, including any changes regarding our land positions and the levels of our land spend; economic changes nationally or in our local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; labor supply shortages and the cost of labor; the availability and cost of land and other raw materials used by us in our homebuilding operations; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; competition within the industries in which we operate; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities, slow growth initiatives and/or local building moratoria; the availability and cost of insurance covering risks associated with our businesses, including warranty and other legal or regulatory proceedings or claims; damage from improper acts of persons over whom we do not have control or attempts to impose liabilities or obligations of third parties on us; weather related slowdowns; the impact of climate change and related governmental regulation; adverse capital and credit market conditions, which may affect our access to and cost of capital; the insufficiency of our income tax provisions and tax reserves, including as a result of changing laws or interpretations; the potential that we do not realize our deferred tax assets; our inability to sell mortgages into the secondary market; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans, and related claims against us; risks related to information technology failures, data security issues, and the effect of cybersecurity incidents and threats; the impact of negative publicity on sales; failure to retain key personnel; the impairment of our intangible assets; the disruptions associated with the COVID-19 pandemic (or another epidemic or pandemic or similar public threat or fear of such an event), and the measures taken to address it; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See Item 1A – Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a further discussion of these and other risks and uncertainties applicable to our businesses. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations.

About PulteGroup

PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America’s largest homebuilding companies with operations in more than 45 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes, American West and John Wieland Homes and Neighborhoods, the company is one of the industry’s most versatile homebuilders able to meet the needs of multiple buyer groups and respond to changing consumer demand. PulteGroup’s purpose is building incredible places where people can live their dreams.

For more information about PulteGroup, Inc. and PulteGroup brands, go to pultegroup.com; pulte.com; centex.com; delwebb.com; divosta.com; jwhomes.com; and americanwesthomes.com. Follow PulteGroup, Inc. on X: @PulteGroupNews.

PulteGroup, Inc.

Consolidated Statements of Operations

($000's omitted, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

Homebuilding

 

 

 

 

 

 

 

 

Home sale revenues

 

$

4,448,168

 

 

$

4,058,930

 

 

$

8,267,754

 

 

$

7,546,567

 

Land sale and other revenues

 

 

39,825

 

 

 

37,604

 

 

 

77,042

 

 

 

67,671

 

 

 

 

4,487,993

 

 

 

4,096,534

 

 

 

8,344,796

 

 

 

7,614,238

 

Financial Services

 

 

111,662

 

 

 

92,219

 

 

 

204,019

 

 

 

150,156

 

Total revenues

 

 

4,599,655

 

 

 

4,188,753

 

 

 

8,548,815

 

 

 

7,764,394

 

 

 

 

 

 

 

 

 

 

Homebuilding Cost of Revenues:

 

 

 

 

 

 

 

 

Home sale cost of revenues

 

 

(3,117,482

)

 

 

(2,856,361

)

 

 

(5,806,569

)

 

 

(5,328,690

)

Land sale and other cost of revenues

 

 

(38,873

)

 

 

(32,494

)

 

 

(75,917

)

 

 

(57,461

)

 

 

 

(3,156,355

)

 

 

(2,888,855

)

 

 

(5,882,486

)

 

 

(5,386,151

)

 

 

 

 

 

 

 

 

 

Financial Services expenses

 

 

(49,334

)

 

 

(46,778

)

 

 

(100,712

)

 

 

(90,813

)

Selling, general, and administrative expenses

 

 

(361,145

)

 

 

(314,637

)

 

 

(718,739

)

 

 

(651,156

)

Equity income from unconsolidated entities, net

 

 

2,167

 

 

 

944

 

 

 

40,069

 

 

 

3,456

 

Other income, net

 

 

13,324

 

 

 

13,586

 

 

 

30,008

 

 

 

15,405

 

Income before income taxes

 

 

1,048,312

 

 

 

953,013

 

 

 

1,916,955

 

 

 

1,655,135

 

Income tax expense

 

 

(239,179

)

 

 

(232,668

)

 

 

(444,846

)

 

 

(402,531

)

Net income

 

$

809,133

 

 

$

720,345

 

 

$

1,472,109

 

 

$

1,252,604

 

 

 

 

 

 

 

 

 

 

Per share:

 

 

 

 

 

 

 

 

Basic earnings

 

$

3.86

 

 

$

3.23

 

 

$

6.99

 

 

$

5.58

 

Diluted earnings

 

$

3.83

 

 

$

3.21

 

 

$

6.93

 

 

$

5.55

 

Cash dividends declared

 

$

0.20

 

 

$

0.16

 

 

$

0.40

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

Number of shares used in calculation:

 

 

 

 

 

 

 

 

Basic

 

 

209,547

 

 

 

222,160

 

 

 

210,692

 

 

 

223,635

 

Effect of dilutive securities

 

 

1,654

 

 

 

1,232

 

 

 

1,682

 

 

 

1,031

 

Diluted

 

 

211,201

 

 

 

223,392

 

 

 

212,374

 

 

 

224,666

 

PulteGroup, Inc.

Condensed Consolidated Balance Sheets

($000's omitted)

(Unaudited)

 

 

 

June 30,

2024

 

December 31,

2023

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

$

1,392,902

 

$

1,806,583

Restricted cash

 

 

53,064

 

 

42,594

Total cash, cash equivalents, and restricted cash

 

 

1,445,966

 

 

1,849,177

House and land inventory

 

 

12,302,301

 

 

11,795,370

Land held for sale

 

 

21,559

 

 

23,831

Residential mortgage loans available-for-sale

 

 

569,387

 

 

516,064

Investments in unconsolidated entities

 

 

210,246

 

 

166,913

Other assets

 

 

1,820,092

 

 

1,545,667

Goodwill

 

 

68,930

 

 

68,930

Other intangible assets

 

 

51,300

 

 

56,338

Deferred tax assets

 

 

54,288

 

 

64,760

 

 

$

16,544,069

 

$

16,087,050

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

Accounts payable

 

$

651,580

 

$

619,012

Customer deposits

 

 

654,427

 

 

675,091

Deferred tax liabilities

 

 

381,021

 

 

302,155

Accrued and other liabilities

 

 

1,459,998

 

 

1,645,690

Financial Services debt

 

 

524,042

 

 

499,627

Notes payable

 

 

1,650,178

 

 

1,962,218

 

 

 

5,321,246

 

 

5,703,793

Shareholders' equity

 

 

11,222,823

 

 

10,383,257

 

 

$

16,544,069

 

$

16,087,050

PulteGroup, Inc.

Consolidated Statements of Cash Flows

($000's omitted)

(Unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

Net income

 

$

1,472,109

 

 

$

1,252,604

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

Deferred income tax expense

 

 

89,321

 

 

 

93,389

 

Land-related charges

 

 

7,798

 

 

 

10,110

 

Depreciation and amortization

 

 

42,891

 

 

 

39,204

 

Equity income from unconsolidated entities

 

 

(40,069

)

 

 

(3,456

)

Distributions of income from unconsolidated entities

 

 

2,358

 

 

 

4,564

 

Share-based compensation expense

 

 

29,084

 

 

 

27,960

 

Other, net

 

 

120

 

 

 

(161

)

Increase (decrease) in cash due to:

 

 

 

 

Inventories

 

 

(473,665

)

 

 

52,001

 

Residential mortgage loans available-for-sale

 

 

(55,346

)

 

 

244,516

 

Other assets

 

 

(294,335

)

 

 

(6,602

)

Accounts payable, accrued and other liabilities

 

 

(123,002

)

 

 

(263,546

)

Net cash provided by operating activities

 

 

657,264

 

 

 

1,450,583

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(55,317

)

 

 

(45,076

)

Investments in unconsolidated entities

 

 

(9,096

)

 

 

(7,858

)

Distributions of capital from unconsolidated entities

 

 

3,474

 

 

 

2,216

 

Other investing activities, net

 

 

(5,262

)

 

 

(3,278

)

Net cash used in investing activities

 

 

(66,201

)

 

 

(53,996

)

Cash flows from financing activities:

 

 

 

 

Repayments of notes payable

 

 

(318,288

)

 

 

(17,305

)

Financial Services borrowings (repayments), net

 

 

24,416

 

 

 

(271,128

)

Proceeds from liabilities related to consolidated inventory not owned

 

 

32,721

 

 

 

91,354

 

Payments related to consolidated inventory not owned

 

 

(70,608

)

 

 

(33,577

)

Share repurchases

 

 

(559,999

)

 

 

(400,000

)

Cash paid for shares withheld for taxes

 

 

(17,623

)

 

 

(10,389

)

Dividends paid

 

 

(84,893

)

 

 

(72,315

)

Net cash used in financing activities

 

 

(994,274

)

 

 

(713,360

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

(403,211

)

 

 

683,227

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

1,849,177

 

 

 

1,094,553

 

Cash, cash equivalents, and restricted cash at end of period

 

$

1,445,966

 

 

$

1,777,780

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

Interest paid (capitalized), net

 

$

13,215

 

 

$

2,757

 

Income taxes paid (refunded), net

 

$

365,061

 

 

$

380,527

 

PulteGroup, Inc.

Segment Data

($000's omitted)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

HOMEBUILDING:

 

 

 

 

 

 

 

 

Home sale revenues

 

$

4,448,168

 

 

$

4,058,930

 

 

$

8,267,754

 

 

$

7,546,567

 

Land sale and other revenues

 

 

39,825

 

 

 

37,604

 

 

 

77,042

 

 

 

67,671

 

Total Homebuilding revenues

 

 

4,487,993

 

 

 

4,096,534

 

 

 

8,344,796

 

 

 

7,614,238

 

 

 

 

 

 

 

 

 

 

Home sale cost of revenues

 

 

(3,117,482

)

 

 

(2,856,361

)

 

 

(5,806,569

)

 

 

(5,328,690

)

Land sale and other cost of revenues

 

 

(38,873

)

 

 

(32,494

)

 

 

(75,917

)

 

 

(57,461

)

Selling, general, and administrative expenses

 

 

(361,145

)

 

 

(314,637

)

 

 

(718,739

)

 

 

(651,156

)

Equity income (loss) from unconsolidated entities, net

 

 

1,117

 

 

 

(110

)

 

 

39,019

 

 

 

2,402

 

Other income, net

 

 

13,324

 

 

 

13,586

 

 

 

30,008

 

 

 

15,405

 

Income before income taxes

 

$

984,934

 

 

$

906,518

 

 

$

1,812,598

 

 

$

1,594,738

 

 

 

 

 

 

 

 

 

 

FINANCIAL SERVICES:

 

 

 

 

 

 

 

 

Income before income taxes

 

$

63,378

 

 

$

46,495

 

 

$

104,357

 

 

$

60,397

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED:

 

 

 

 

 

 

 

 

Income before income taxes

 

$

1,048,312

 

 

$

953,013

 

 

$

1,916,955

 

 

$

1,655,135

 

PulteGroup, Inc.

Segment Data, continued

($000's omitted)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

Home sale revenues

 

$

4,448,168

 

$

4,058,930

 

$

8,267,754

 

$

7,546,567

 

 

 

 

 

 

 

 

 

Closings - units

 

 

 

 

 

 

 

 

Northeast

 

 

378

 

 

315

 

 

663

 

 

652

Southeast

 

 

1,499

 

 

1,405

 

 

2,944

 

 

2,573

Florida

 

 

2,150

 

 

2,067

 

 

4,067

 

 

3,819

Midwest

 

 

1,196

 

 

918

 

 

2,186

 

 

1,675

Texas

 

 

1,472

 

 

1,511

 

 

2,800

 

 

2,819

West

 

 

1,402

 

 

1,302

 

 

2,532

 

 

2,374

 

 

 

8,097

 

 

7,518

 

 

15,192

 

 

13,912

Average selling price

 

$

549

 

$

540

 

$

544

 

$

542

 

 

 

 

 

 

 

 

 

Net new orders - units

 

 

 

 

 

 

 

 

Northeast

 

 

400

 

 

400

 

 

841

 

 

785

Southeast

 

 

1,396

 

 

1,556

 

 

2,790

 

 

2,903

Florida

 

 

1,746

 

 

1,910

 

 

3,718

 

 

3,788

Midwest

 

 

1,265

 

 

1,253

 

 

2,539

 

 

2,336

Texas

 

 

1,275

 

 

1,388

 

 

2,729

 

 

2,812

West

 

 

1,567

 

 

1,440

 

 

3,411

 

 

2,677

 

 

 

7,649

 

 

7,947

 

 

16,028

 

 

15,301

Net new orders - dollars

 

$

4,358,508

 

$

4,271,008

 

$

9,057,167

 

$

8,061,001

 

 

 

 

 

 

 

 

 

Unit backlog

 

 

 

 

 

 

 

 

Northeast

 

 

 

 

 

 

745

 

 

607

Southeast

 

 

 

 

 

 

2,092

 

 

2,236

Florida

 

 

 

 

 

 

3,443

 

 

4,610

Midwest

 

 

 

 

 

 

2,045

 

 

2,011

Texas

 

 

 

 

 

 

1,566

 

 

1,782

West

 

 

 

 

 

 

3,091

 

 

2,312

 

 

 

 

 

 

 

12,982

 

 

13,558

Dollars in backlog

 

 

 

 

 

$

8,109,128

 

$

8,188,502

PulteGroup, Inc.

Segment Data, continued

($000's omitted)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

MORTGAGE ORIGINATIONS:

 

 

 

 

 

 

 

 

Origination volume

 

 

5,105

 

 

 

4,539

 

 

 

9,437

 

 

 

8,408

 

Origination principal

 

$

2,140,103

 

 

$

1,790,977

 

 

$

3,895,150

 

 

$

3,307,427

 

Capture rate

 

 

86.5

%

 

 

79.7

%

 

 

85.4

%

 

 

79.1

%

Supplemental Data

($000's omitted)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

Interest in inventory, beginning of period

 

$

148,101

 

 

$

141,271

 

 

$

139,078

 

 

$

137,262

 

Interest capitalized

 

 

29,284

 

 

 

31,927

 

 

 

59,903

 

 

 

63,729

 

Interest expensed

 

 

(28,023

)

 

 

(31,204

)

 

 

(49,619

)

 

 

(58,997

)

Interest in inventory, end of period

 

$

149,362

 

 

$

141,994

 

 

$

149,362

 

 

$

141,994

 

PulteGroup, Inc.

Reconciliation of Non-GAAP Financial Measures

This report contains information about our debt-to-capital ratios. These measures could be considered non-GAAP financial measures under the SEC's rules and should be considered in addition to, rather than as a substitute for, comparable GAAP financial measures. We calculate total net debt by subtracting total cash, cash equivalents, and restricted cash from notes payable to present the amount of assets needed to satisfy the debt. We use the debt-to-capital and net debt-to-capital ratios as indicators of our overall leverage and believe they are useful financial measures in understanding the leverage employed in our operations. We believe that these measures provide investors relevant and useful information for evaluating the comparability of financial information presented and comparing our profitability and liquidity to other companies in the homebuilding industry. Although other companies in the homebuilding industry report similar information, the methods used may differ. We urge investors to understand the methods used by other companies in the homebuilding industry to calculate these measures and any adjustments thereto before comparing our measures to those of such other companies.

The following table sets forth a reconciliation of the debt-to-capital ratios ($000's omitted):

Debt-to-Capital Ratios

 

 

 

 

 

 

 

June 30,

2024

 

December 31,

2023

Notes payable

 

$

1,650,178

 

 

$

1,962,218

 

Shareholders' equity

 

 

11,222,823

 

 

 

10,383,257

 

Total capital

 

$

12,873,001

 

 

$

12,345,475

 

Debt-to-capital ratio

 

 

12.8

%

 

 

15.9

%

 

 

 

 

 

Notes payable

 

$

1,650,178

 

 

$

1,962,218

 

Less: Total cash, cash equivalents, and

restricted cash

 

 

(1,445,966

)

 

 

(1,849,177

)

Total net debt

 

$

204,212

 

 

$

113,041

 

Shareholders' equity

 

 

11,222,823

 

 

 

10,383,257

 

Total net capital

 

$

11,427,035

 

 

$

10,496,298

 

Net debt-to-capital ratio

 

 

1.8

%

 

 

1.1

%

 

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