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Investing.com - PulteGroup Inc (NYSE:PHM) reported first-quarter earnings on Tuesday that exceeded analyst expectations, driving shares up 2.03% in early trading.
The homebuilder’s strong performance came despite ongoing affordability challenges in the housing market.
PulteGroup reported earnings per share of $2.57 for the first quarter, surpassing the analyst estimate of $2.47 by $0.10. Revenue for the quarter came in at $3.89 billion, beating the consensus estimate of $3.85 billion.
However, this represents a 2% decrease from the $3.7 billion in home sale revenues reported in the same quarter last year.
The company’s net income for the quarter was $523 million, down from $663 million in the prior year period.
The decrease was partly due to the absence of one-time gains recorded in the first quarter of 2024, including a $38 million pre-tax gain from a joint venture sale and a $27 million pre-tax insurance benefit.
PulteGroup’s home sale gross margin remained strong at 27.5%, although it decreased 210 basis points YoY.
Net new orders for the quarter totaled 7,765 homes with a value of $4.5 billion, down from 8,379 homes valued at $4.7 billion in the prior year. The company attributed this decrease to lower gross orders as consumers faced affordability challenges and increased macroeconomic uncertainty.
Despite these challenges, PulteGroup maintained a strong financial position, ending the quarter with a cash balance of $1.3 billion and a debt-to-capital ratio of 11.7%. The company also repurchased 2.8 million shares for $300 million during the quarter.