Investing.com- On Thursday, PulteGroup Inc. (NYSE: PHM) reported first quarter earnings of $1.79 per share, missing analyst estimates of $1.82, as the homebuilder navigated challenging market conditions with higher incentives and compressed margins. Revenue of $3.3 billion fell short of the $3.39 billion consensus and declined 12% YoY from $3.7 billion.

Shares of the company edged up 0.04% in pre-market trading following the results.

The company closed 6,102 homes during the quarter, down 7% from the prior year, with an average selling price of $542,000, a 5% decrease.

Home sale gross margin compressed to 24.4% from 27.5% in the prior year period, reflecting the impact of higher incentives as PulteGroup worked to reduce excess spec inventory amid competitive market dynamics.

Selling, general and administrative expenses were $380 million, or 11.5% of home sale revenues, compared with 10.5% in the prior year.

Net new orders increased 3% to 8,034 homes valued at $4.6 billion, up from 7,765 homes worth $4.5 billion in the prior year. The company operated from an average of 1,043 communities, a 9% increase YoY. Unit backlog stood at 10,427 homes with a value of $6.5 billion at quarter end.

"Our first quarter results reflect PulteGroup’s ability to successfully navigate current market conditions as we work to meet buyer demand, turn our assets and drive high returns," said Ryan Marshall, President and CEO. "Within a demand environment impacted by domestic and global dynamics, we see a consumer with concerns about affordability and the economy, but still desirous of homeownership."

PulteGroup invested $1.3 billion in land acquisition and development during the quarter and returned $360 million to shareholders through $308 million in share repurchases and dividends.

The company’s board approved a $1.5 billion increase to its share repurchase authorization, bringing total authorization to $2.1 billion. The company ended the quarter with $1.8 billion in cash and a debt-to-capital ratio of 12.3%.