PulteGroup reported a third-quarter profit decline as home-sale revenue and closings fell, while its backlog grew, leaving the U.S. builder with a larger pipeline of homes. The results appeared in an earnings release filed with the Securities and Exchange Commission on Oct. 22.
Closings totaled 6,876, down 9% from a year earlier. Home-sale revenue came to $3.9 billion, also a 9% decline, while the average price of homes closed slipped 1% to $561,000.
Net income for the quarter was $476 million, compared with $586 million in the prior-year quarter. Diluted earnings per share eased to $2.53 from $2.96. Home sale gross margin came in at 24.8%, versus 26.2% a year earlier. The company said the margin included $26 million in land impairments, about 70 basis points.
PulteGroup logged 6,208 net new home orders, 6% fewer than a year earlier. At quarter-end, its backlog numbered 10,298 homes, up 4%, and was valued at $6.4 billion, compared with $6.2 billion a year earlier. The company also repurchased $350 million of common shares during the quarter.
PulteGroup President and CEO Ryan Marshall linked softer demand to affordability concerns, citing borrowing costs, inflation and global unrest. He described higher borrowing costs as a strain on affordability for buyers and said they were also making it harder for homeowners to sell existing properties.
Marshall said PulteGroup was tailoring home prices and construction levels to current conditions. He also said PulteGroup benefited from a diversified operating platform, with move-up and active-adult buyers accounting for more than 60% of its business; he described those buyers as more profitable segments.
