PulteGroup, the Atlanta-based homebuilder, experienced a decline in earnings and revenue in the fourth quarter of the year. This decrease was primarily due to a drop in the average selling price and the number of homes closed.
Decrease in Profit and Revenue
PulteGroup recorded a profit of $711 million in the fourth quarter, compared to $882 million during the same period in the previous year. Earnings per share also decreased from $3.85 to $3.28, considering a slightly larger base of outstanding shares. Analysts had expected earnings per share of $3.21.
The company’s quarterly revenue fell from $5.08 billion in the previous year to $4.29 billion, below the projected $4.47 billion.
Home Closures and Average Sales Price
In Q4, PulteGroup closed a total of 7,615 homes with an average sales price of $547,000. This represents a decline from the previous year, where they closed 8,848 homes at an average sales price of $561,000.
Increase in Net New Orders
Despite the decline in earnings and revenue, PulteGroup saw a significant increase in net new orders. The number of new orders jumped 57% to 6,214 homes in the quarter. This surge can be attributed to an improved selling environment and a decrease in cancellations. The dollar value of these orders also increased by 56% to $3.4 billion. Cancellations accounted for only 9% of the quarter’s starting backlog, down from 11% in the previous year’s quarter.
