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High Homebuilding Pricing to Aid PulteGroup (PHM) Q1 Earnings
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PulteGroup, Inc.’s (PHM - Free Report) Homebuilding segment — accounting for more than 97% of total revenues — is expected to have registered growth, given the rising trend of work from home owing to the coronavirus outbreak. Consequently, the segment is likely to contribute to overall revenues when it reports first-quarter 2022 results on Apr 28.
The company has exhibited a solid performance so far this year, with the stock outperforming the Zacks Building Products - Home Builders industry. PulteGroup has been riding high on its focus on entry-level buyers and protecting liquidity, prudent management of cash flows as well as the land investment strategy. Yet, continuous supply chain issues pose a concern.
Click here to know how the company’s overall Q1 performance is expected to be.
Image Source: Zacks Investment Research
A Look at Q1 Segmental Performance
PulteGroup’s Homebuilding segment is expected to have registered growth, courtesy of a higher average selling price or ASP.
The Zacks Consensus Estimate for Homebuilding revenues of $2.96 billion suggests an increase of 12.7% on a year-over-year basis.
PulteGroup expects ASP within $500,000-$510,000, indicating an increase from $430,000 registered a year ago. It expects deliveries within 5,600-6,000 homes, indicating a decline from 6,044 homes delivered a year ago.
The consensus mark for ASP is $505,000, which points to a 17.4% year-over-year improvement. For the quarter to be reported, the consensus mark for the number of homes closed is 5,815, which points to a 3.8% year-over-year decline.
A prudent land investment strategy and focus on entry-level buyers are expected to have benefited PulteGroup in the first quarter. Yet, the company has been witnessing supply chain challenges that are resulting in construction-related delays. The labor market tightened with the limited availability of labor, arresting the rapid growth in housing production. These headwinds might have impacted the upcoming results to some extent.
Nonetheless, improved operating leverage and higher pricing are expected to have mitigated the risks. As such, given these cost price dynamics, PHM expects homebuilding gross margins to expand to 28.5-29% for first-quarter 2022 from 25.5% reported in the year-ago period.
SG&A expenses (as a percentage of home sales revenues) for the quarter are expected in the 10.7-10.9% range. The figure was the same a year ago.
Overall Q1 Earnings & Revenue Expectations
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.70 per share, indicating 32.8% growth from the year-ago figure of $1.28. Also, the consensus mark for revenues is $3.05 billion, suggesting 11.9% year-over-year growth.
NVR, Inc. (NVR - Free Report) reported first-quarter 2022 results, with earnings and revenues beating the respective Zacks Consensus Estimate and increasing year over year.
NVR’s first-quarter results benefited from higher average price of settlements in the quarter coupled with lower lumber prices.
D.R. Horton, Inc.’s (DHI - Free Report) second-quarter fiscal 2022 earnings and revenues beat the respective Zacks Consensus Estimate as well as improved on a year-over-year basis.
DHI increased its revenue guidance for the full year, depicting DHI’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
UFP Industries, Inc.’s (UFPI - Free Report) first-quarter 2022 earnings and net sales beat the Zacks Consensus Estimate as well as improved impressively on a year-over-year basis.
With this, UFPI’s earnings and sales surpassed the consensus mark in all the trailing five quarters. The uptrend was mainly driven by the diversity of markets and an improved pricing model.
Image: Bigstock
High Homebuilding Pricing to Aid PulteGroup (PHM) Q1 Earnings
PulteGroup, Inc.’s (PHM - Free Report) Homebuilding segment — accounting for more than 97% of total revenues — is expected to have registered growth, given the rising trend of work from home owing to the coronavirus outbreak. Consequently, the segment is likely to contribute to overall revenues when it reports first-quarter 2022 results on Apr 28.
The company has exhibited a solid performance so far this year, with the stock outperforming the Zacks Building Products - Home Builders industry. PulteGroup has been riding high on its focus on entry-level buyers and protecting liquidity, prudent management of cash flows as well as the land investment strategy. Yet, continuous supply chain issues pose a concern.
Click here to know how the company’s overall Q1 performance is expected to be.
Image Source: Zacks Investment Research
A Look at Q1 Segmental Performance
PulteGroup’s Homebuilding segment is expected to have registered growth, courtesy of a higher average selling price or ASP.
The Zacks Consensus Estimate for Homebuilding revenues of $2.96 billion suggests an increase of 12.7% on a year-over-year basis.
PulteGroup expects ASP within $500,000-$510,000, indicating an increase from $430,000 registered a year ago. It expects deliveries within 5,600-6,000 homes, indicating a decline from 6,044 homes delivered a year ago.
The consensus mark for ASP is $505,000, which points to a 17.4% year-over-year improvement. For the quarter to be reported, the consensus mark for the number of homes closed is 5,815, which points to a 3.8% year-over-year decline.
A prudent land investment strategy and focus on entry-level buyers are expected to have benefited PulteGroup in the first quarter. Yet, the company has been witnessing supply chain challenges that are resulting in construction-related delays. The labor market tightened with the limited availability of labor, arresting the rapid growth in housing production. These headwinds might have impacted the upcoming results to some extent.
Nonetheless, improved operating leverage and higher pricing are expected to have mitigated the risks. As such, given these cost price dynamics, PHM expects homebuilding gross margins to expand to 28.5-29% for first-quarter 2022 from 25.5% reported in the year-ago period.
SG&A expenses (as a percentage of home sales revenues) for the quarter are expected in the 10.7-10.9% range. The figure was the same a year ago.
Overall Q1 Earnings & Revenue Expectations
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.70 per share, indicating 32.8% growth from the year-ago figure of $1.28. Also, the consensus mark for revenues is $3.05 billion, suggesting 11.9% year-over-year growth.
PulteGroup — a Zacks Rank #3 (Hold) company — surpassed earnings estimates in 19 of the trailing 21 quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Few Recent Construction Releases
NVR, Inc. (NVR - Free Report) reported first-quarter 2022 results, with earnings and revenues beating the respective Zacks Consensus Estimate and increasing year over year.
NVR’s first-quarter results benefited from higher average price of settlements in the quarter coupled with lower lumber prices.
D.R. Horton, Inc.’s (DHI - Free Report) second-quarter fiscal 2022 earnings and revenues beat the respective Zacks Consensus Estimate as well as improved on a year-over-year basis.
DHI increased its revenue guidance for the full year, depicting DHI’s industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.
UFP Industries, Inc.’s (UFPI - Free Report) first-quarter 2022 earnings and net sales beat the Zacks Consensus Estimate as well as improved impressively on a year-over-year basis.
With this, UFPI’s earnings and sales surpassed the consensus mark in all the trailing five quarters. The uptrend was mainly driven by the diversity of markets and an improved pricing model.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.