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PulteGroup Reports Second Quarter 2010 Financial Results

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El Genio dijo...


PulteGroup, Inc. (NYSE: PHM):

Second Quarter Earnings of $0.20 Per Share Reflect Ongoing Margin Expansion, Greater SG&A Leverage, Lower Land-Related Charges and Tax Benefit
Closings Double to 5,030 Homes, as Revenue Climbs to $1.3 Billion
Homebuilding SG&A Drops 580 Basis Points to 11.7% of Home Sales Revenue
Backlog Up 44% to 5,644 Homes Valued at $1.6 Billion
Quarter-end Cash of $2.7 Billion; Net-Debt-to-Total- Capitalization Ratio Drops to 32%

PulteGroup, Inc. (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2010. For the quarter, the Company reported net income of $76 million, or $0.20 per share, compared with a prior year net loss for the second quarter of $189 million, or $0.74 per share.

PulteGroup's second quarter results include approximately $45 million of land and mortgage-related charges. The Company's second quarter results also include a net benefit from income taxes of $82 million. In the prior year, the Company recorded land and mortgage-related charges totaling $130 million. Prior year results also include a benefit of $16 million associated with the repurchase of debt during the quarter.

"We are pleased to report PulteGroup's second quarter results, which demonstrate ongoing progress in driving key business initiatives, along with expected benefits from last year's Centex merger," said Richard J. Dugas, Jr., Chairman, President and Chief Executive Officer of PulteGroup. "The Company's reported pre-tax loss for the quarter of $6 million is inclusive of $45 million in land and mortgage-related charges. In addition to lower land impairments, the quarter reflects the positive impact of expanded gross margins and improved overhead leverage."

El Genio dijo...

Second Quarter Results

Benefiting from the inclusion of Centex's operations, revenue from home sales (settlements) in the second quarter increased 93% to $1.3 billion, compared with $654 million in the prior year. The increase in revenue reflects a doubling in closing volumes to 5,030 homes, partially offset by a 4% decrease in the Company's average selling price to $251,000.

For the quarter, the Company's homebuilding operations generated pre-tax income of $12 million, compared with a pre-tax loss of $187 million for the same period last year. Second quarter cost of sales related to home sales totaled $1.1 billion, inclusive of $26 million of land-related charges. For the prior year, cost of sales related to home sales, inclusive of $109 million in land-related charges, was $725 million. Excluding land-related charges, interest expense and merger-related costs, home sale gross margin for the second quarter 2010 would have been 17.2%. This represents an increase of 780 basis points over the prior year and a sequential increase of 90 basis points over the first quarter 2010.

Homebuilding selling, general and administrative (SG&A) expense for the quarter was $147 million, compared with $114 million last year and down from $151 million in the first quarter of 2010. Homebuilding SG&A costs for the quarter dropped to 11.7% of home sales revenue, compared with 17.5% in the comparable period last year and 15.4% in the first quarter 2010

Net new home orders for the second quarter were 4,218 homes, an increase of 25% from the prior year and essentially unchanged from the first quarter 2010. During the quarter, the Company's cancellation rate was 18.2%, which was flat with the first quarter 2010 and down from 21.7% in the prior year. The lower cancellation rate is partially due to a process change implemented by the Company at the start of 2010. PulteGroup's quarter-end backlog was up 44% to 5,644 homes valued at $1.6 billion, compared with prior year backlog of 3,916 homes with a value of $1.1 billion.

"Recent buyer demand has been stable, albeit at very low levels, after the pull back experienced following expiration of the federal tax credit at the end of April," said Mr. Dugas. "While reasonable to expect a modest seasonal pick up in the second half of 2010, long-term we believe that any significant housing recovery will require a stronger economy, higher employment and greater overall consumer confidence."

The Company's financial services operations reported a second quarter pre-tax loss of $9 million, essentially unchanged from the prior year. Higher loan origination volumes and revenue, up 72% and 75%, respectively, were offset by $17 million in charges related to loan repurchase liabilities taken in the quarter. In the prior year, the Company recorded an $11 million charge related to loan repurchase liabilities. Mortgage capture rate for the quarter was 76%, compared with 91% for the same quarter last year.

The Company ended the quarter with a cash balance of $2.7 billion. Adjusting for its cash position, PulteGroup's net-debt-to-total-capitalization ratio was 32%, down from 38% at the comparable period last year and 43% at year end 2009.

Six Month Results

For the six months ended June 30, 2010, PulteGroup reported net income of $64 million, or $0.17 per share, compared with a prior year net loss of $704 million, or $2.77 per share. Consolidated revenue for the period was $2.3 billion, an increase of 84% from $1.3 billion for the first six months of last year.

Revenue from home sales for the period was $2.2 billion, compared with prior year revenue of $1.2 billion. Higher revenue for the period resulted from a 90% increase in the number of homes closed to 8,825, partially offset by a 3% decrease in average selling price to $254,000.