PulteGroup announced its financial results for the second quarter, which ended on June 30, 2024. The Company recorded a net income of $809 million, translating to $3.83 per share. This figure includes a $52 million pre-tax insurance benefit (equivalent to $0.19 per share) and a $13 million benefit (or $0.06 per share) resulting from favorable resolutions of certain state tax matters. In the same quarter last year, the Company reported a net income of $720 million, or $3.21 per share, which also included a $65 million pre-tax insurance benefit.
Ryan Marshall, President and Chief Executive Officer of PulteGroup, stated, “PulteGroup’s balanced operating model continues to deliver outstanding financial results, with increases in closings, average sales price, and gross margin driving a 19% rise in our earnings to $3.83 per share. The resulting strong cash flows provide us with significant flexibility, allowing us to intelligently allocate capital to invest in growth while returning funds to shareholders and further enhancing our overall capital structure.”
Mr. Marshall also noted that while short-term interest rate fluctuations may affect homebuying demand, long-term market dynamics are still favorable due to a structural shortage of homes resulting from years of underbuilding. “With a return on equity of 27.1% over the past 12 months, we are successfully navigating these conditions by managing sales prices, pace, and starts on a community-by-community basis to achieve high returns on invested capital and equity over time.”
Home sale revenues for the second quarter rose by 10% year-over-year to $4.4 billion. This growth was driven by an 8% increase in closings to 8,097 homes and a 2% rise in average sales price to $549,000.
The Company reported homebuilding gross margins of 29.9% for the second quarter, reflecting a 30 basis point improvement compared to both the previous year and the first quarter of 2024. The reported SG&A expense for the second quarter was $361 million, or 8.1% of home sale revenues, which includes the $52 million pre-tax insurance benefit recognized during the quarter. In the prior year, SG&A expense was $315 million, or 7.8% of home sale revenues, which included a $65 million pre-tax insurance benefit.
In the second quarter, PulteGroup received net new orders for 7,649 homes, slightly down from 7,947 homes in the same period last year. However, the dollar value of these net new orders increased by 2% year-over-year to $4.4 billion. The Company operated out of an average of 934 communities during the quarter, marking a 3% increase compared to Q2 2023.
By the end of the second quarter, the Company’s backlog consisted of 12,982 homes valued at $8.1 billion.
PulteGroup’s financial services operations reported pre-tax income of $63 million for the second quarter, an increase from $46 million in the prior year. This 36% rise was driven by gains across all business lines, including mortgage, title, and insurance. The mortgage capture rate for the second quarter improved to 86%, up from 80% a year ago.
The reported income tax expense for the second quarter was $239 million, resulting in an effective tax rate of 22.8%. This rate includes the $13 million benefit from the favorable resolution of certain state tax matters recognized during the quarter.
During the second quarter, PulteGroup repurchased 2.8 million shares of its outstanding common stock for $314 million, averaging $113.79 per share. The Company also completed a tender offer for $300 million of its outstanding senior notes, reducing its outstanding notes payable to $1.7 billion by the end of the quarter. Including these transactions, PulteGroup ended the second quarter with $1.4 billion in cash and a debt-to-capital ratio of 12.8%.
A conference call to discuss PulteGroup’s second quarter 2024 results is scheduled for Tuesday, July 23, 2024, at 8:30 a.m. Eastern Time.
