Sergio Flores | Bloomberg | Getty Images
A contractor mixes cement for a home under construction in the PulteGroup Del Webb at Mirehaven development in Albuquerque, New Mexico.
PulteGroup’s quarterly profit beat analysts’ estimates on Tuesday with Chief Executive Ryan Marshall saying demand among U.S. homebuyers was holding up strongly in the face of rising interest rates.
The United States’ third largest homebuilder, which mainly sells single-family houses, said average prices rose to $413,000 in the first quarter from $375,000 a year earlier, while it sold 4,626 homes compared to 4,225 in the equivalent quarter of 2017.
“Robust buyer demand in the face of mortgage and financial market volatility attests to the strong underpinnings of this housing recovery,” Marshall said in the earnings statement.
Orders, an indication of future revenue for homebuilders, rose 12.2 percent to 6,875 homes in the quarter ended March 31.
Earlier this month, bigger rival Lennar signaled confidence ahead of the crucial spring selling season by raising the number of homes it expects to sell in fiscal 2018.
The U.S. housing market is still recovering from the long-term damage of the subprime crash a decade ago, but many housebuilders are now fighting rising costs and labor shortages, rather than problems with demand.
Home sales growth in the United States may ease this year as interest rates rise and middle-class Americans receive fewer perks under a Republican overhaul of taxes.
Pulte’s gross margins were 23.6 percent, up from 23.2 percent a year earlier.
The company’s net income soared 87 percent to $170.8 million, or 59 cents per share, beating the average analyst estimate of a profit of 45 cents per share, according to Thomson Reuters.
Revenue jumped 20.9 percent to $1.97 billion.
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