PulteGroup (PHM) Tops Q3 EPS by 1c; Home Sale Revs Rose 8%

PulteGroup (NYSE: PHM) reported Q3 EPS of $0.37, $0.01 better than the analyst estimate of $0.36. Revenue for the quarter came in at $1.59 billion versus the consensus estimate of $1.58 billion.

• Home Sale Revenues Increased 4% to $1.6 Billion Driven by an 8% Increase in Average Selling Price to $334,000
• Gross Margin of 22.9%, Which Includes the Impact of Acquisition Accounting Adjustments Associated with its Purchase of the Homebuilding Assets of Dominion Homes, Increased 200 Basis Points Over 2013
• Q3 Absorption Pace Increased 5% Excluding Impact of Dominion Acquisition
• Q3 Backlog Value Increased 8% to $2.6 Billion on a Unit Backlog Increase of 5% to 7,934 Homes, Inclusive of Assumed Dominion Backlog

"I am extremely pleased with the benefits we continue to realize from our Value Creation strategy and with the resulting balance sheet strength and flexibility we have today," said Richard J. Dugas, Jr., Chairman, President and Chief Executive Officer of PulteGroup. "By remaining disciplined in our construction and land investment practices, we continue to improve our returns on invested capital while positioning the Company to take advantage of market opportunities.

"Our view of the U.S. housing market remains positive, as continued improvements in both the economy and employment provide ongoing support to an industry that continues to benefit from low inventory, low mortgage rates and favorable demographic trends. Further, we are encouraged by proposed changes at FHFA which have the potential to improve mortgage availability, particularly for first-time homebuyers. Consistent with our expectation for an ongoing recovery in housing, we have authorized $2.4 billion for land investment in 2015, an increase of $600 to $700 million over our expected 2014 land expenditures.

"Our first priority in allocating capital is to invest responsibly in our business, and then to return excess funds to shareholders in the form of dividends and share repurchases on a routine and systematic basis. Given the strong cash flows we expect to realize in the future, our Board has approved a 60% increase of PulteGroup's quarterly dividend to $0.08 per share and a $750 million increase in our share repurchase authorization. By intelligently investing in our business while routinely returning funds to shareholders, we are aligning our capital allocation decisions with our Value Creation strategy and our fundamental goal of increasing long-term total shareholder returns."

Earlier, the company declared a quarterly dividend of $0.08 per share, or $0.32 annualized. This is a 60% increase from the prior dividend of $0.05.

The dividend will be payable on January 6, 2015, to stockholders of record on December 15, 2014, with an ex-dividend date of December 11, 2014.

The annual yield on the dividend is 1.7 percent.

PulteGroup also announced that its Board of Directors approved a share repurchase authorization of $750 million. At the end of the third quarter, the Company had $85 million available under its existing repurchase authorization. The Company may repurchase shares in the open market, in privately negotiated transactions, or otherwise, depending on prevailing market conditions and other factors. The share repurchase program may be suspended or discontinued at any time.

For earnings history and earnings-related data on Pulte Homes Inc. (PHM) click here.

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