PulteGroup, Inc. (NYSE:PHM), Atlanta on Tuesday reported net income of $92 million, or $0.28 per share, including $0.03 per share of expense associated with the resolution of insurance matters, for its first quarter ended March 31, 2017. The gain compared to net income of $83 million, or $0.24 per share, in the prior-year quarter. Analysts were expecting a gain of $0.29 per share.
Home sale revenues for the first quarter totaled $1.6 billion, an increase of 14% over the prior year. Higher revenues for the quarter were driven by a 7% increase in closings to 4,225 homes, in combination with a 6% increase in average selling price to $375,000.
Home sale gross profits for the quarter totaled $368 million, or 23.2% of home sale revenues, compared with $356 million, or 25.5% of home sale revenues, in the prior year. SG&A expense for the period was $236 million, or 14.9% of home sale revenues, inclusive of $15 million of expenses associated with the resolution of insurance matters. SG&A expense for the first quarter of 2016 was $242 million, or 17.4% of home sale revenues.
For the quarter, net new orders increased 8% to 6,126 homes, while the dollar value of net new orders increased 16% over the prior year to $2.4 billion. The company operated out of 780 communities for the quarter, which is an increase of 10% over last year.
PulteGroup’s backlog at quarter end totaled 9,323 homes valued at $3.8 billion, compared with prior year backlog of 8,755 homes valued at $3.4 billion. The average sales price in backlog of $408,000 is up 6% over the prior year and reflects the ongoing shift in both the mix of homes sold toward more move-up product and toward higher prices within the buyer category.
Higher home-builder closing volumes helped increase pretax income in the company’s financial services operations to $14 million for the quarter, compared with pretax income of $10 million in the prior year. Mortgage capture rate for the quarter was 80% compared with 81% in the comparable prior year period.
The company ended the quarter with $424 million of cash. During the quarter, the Company repurchased 4.7 million common shares for $100 million, or an average price of $21.30 per share.
“Buyer interest during the spring selling season of 2017 has been high and points to the ongoing strength in recovery for the housing industry,” said Ryan Marshall, President and CEO of PulteGroup. “Strong buyer demand continues to be supported by an improving economy and resulting employment and wage gains, high consumer confidence, a low inventory of new and existing homes, and the powerful demographic forces of Millennials and Baby Boomers. Given the strength of our land pipeline and our disciplined investment practices, PulteGroup is well positioned to grow its market presence and improve its financial performance within this operating environment.”
