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UPDATE 2-Homebuilder Pulte posts slowest order growth in over a year
April 25, 2017 / 11:01 AM / 7 months ago

UPDATE 2-Homebuilder Pulte posts slowest order growth in over a year

(Adds shares, analyst comment)

April 25 (Reuters) - U.S. homebuilder PulteGroup Inc , the No. 3 U.S. homebuilder, posted its slowest growth in quarterly orders in more than a year, adding to concerns about the strength of a recovery in the U.S. housing market.

Pulte’s shares were down 2.9 percent at $22.40 in premarket trading on Tuesday.

Orders, a key metric of future revenue for homebuilders, rose 8.4 percent to 6,126 homes in the first quarter, Pulte said in a statement.

Last week, bigger rival D.R. Horton Inc reported a quarterly profit that topped estimates but was not enough to allay concerns about the resilience of a recovery in the U.S. housing market.

A string of weak housing data in recent weeks has also weighed on the sector. Single-family homebuilding, which accounts for the largest share of the residential housing market, fell 6.2 percent in March.

Wedbush Securities analyst Jay McCanless said slower-than-expected unit closing pace would come under focus in the post-earnings call, noting that first-quarter housing revenues and unit closing were below his forecast.

Pulte, which mainly sells single-family homes, said the average price of homes increased to $375,000 from $353,000 a year earlier, while the number of homes sold rose to 4,225 from 3,945.

“Buyer interest during the spring selling season of 2017 has been high and points to the ongoing strength in recovery for the housing industry,” Chief Executive Ryan Marshall said.

Pulte appointed Marshall to its top job in September after Richard Dugas stepped down, bowing to pressure from founder William Pulte.

William Pulte said in July that the company had a lot of ground to cover, mainly on cost controls and home sales.

The company’s net income rose to $91.5 million, or 28 cents per share, in the first quarter ended March 31, from $83.3 million, or 24 cents per share, a year earlier.

Excluding one-time items, the company earned 31 cents per share, beating the average analyst estimate of 29 cents, according to Thomson Reuters I/B/E/S.

Total revenue rose 13.7 percent to $1.63 billion but came in short of the average estimate $1.75 billion.

Up to Monday’s close, the Atlanta, Georgia-based company’s shares had risen 25.6 percent this year. (Reporting by Arunima Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty)

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