Boston, MA 07/24/2014 (wallstreetpr) – PulteGroup, Inc. (NYSE:PHM) reported its 2Q2014 financial performance before the market opened today. The home-builder’s earnings and revenue improved from last year’s figures but fell short of Wall Street expectation.
On the earnings and revenue increases, the company praised price appreciation in the quarter, which offset the low new orders compared to last year. Furthermore, the CEO Richard Dugas observed that operations improvement combined with the price appreciation helped to boost gross margin thereby supporting net income improvement.
2Q at a glance
PulteGroup, Inc. (NYSE:PHM) reported a profit of $41.9 million, suggesting 11 cents a share. That compared with 36.4 million or nine cents per share recorded in the same quarter last year. Revenue was up 0.5 percent in the just reported quarter to $1.29 billion.
However, analysts on the average were looking for earnings of 25 cents per share on revenue of $1.33 billion for the quarter.
Impact of charges
Going deeper into the 2Q figures, PulteGroup, Inc. (NYSE:PHM) reported that the quarter was impacted by $26 million in tax expenses and $88 million in charges related to office relocation and insurance reserves. However, it faced only $2 million in tax expenses and $67 million in charges related to debt repurchases and contractual dispute in the same quarter last year.
PulteGroup, Inc. (NYSE:PHM) reported that new orders in 2Q dropped 2.2 percent compared to last year. However, the value of new orders was better than last year, increasing 5 percent to $1.6 billion. Internal improvement in the company also played an important role in boosting gross margin that jumped to 23.6 percent, thus helping the bottom line.
The environment of low inventory, low mortgage rates and improving economic and employment situation also boost 2Q performance and PulteGroup, Inc. (NYSE:PHM) expects to continue benefiting from the same in the future.
Industry barometer
As a giant Home-builder, PulteGroup, Inc. (NYSE:PHM) is an important performance gauge for the sector.
