PulteGroup 4Q loss widens, as demand for new homes slides
PulteGroup's (PHM) fourth-quarter loss widened to $165.4 million, or 44 cents a share, from to $116.9 million, or 31 cents a share, in 2009, driven by decreased demand for new housing. The firm said its fourth quarter loss includes $196 million in costs associated with land-related charges, restructuring, debt pay-down and other financing amendments during the period. Fourth quarter 2010 net new orders were 3,044 homes, a decrease of 19% from prior year orders of 3,748 homes. "After four years of steep declines, the U.S. housing market continues to show signs of stabilizing, albeit at historically low levels," said Richard Dugas Jr., chairman, president and CEO of PulteGroup. "Businesses are once again adding jobs, which directly stimulates buying and, in turn, consumer confidence, both of which are critical to ultimately raising demand for new homes." Bloomfield Hills, Mich.-based PulteGroup narrowed losses for the full fiscal year, down to $1.1 billion, or $2.90 a share, from a loss of $1.18 billion, or $3.94 a share, a year earlier. As a result of shares issued for the Centex merger, 2010 earnings per share are based on 379 million shares outstanding, whereas 2009 earnings per share were calculated on 300 million shares outstanding. Pulte's revenue decreased slightly during the three months ended Dec. 31, down to $1.2 billion from $1.7 billion a year prior. On an annual basis, the firm reported revenue of $4.57 billion, up 12% from $4.08 billion in 2009. Lower revenue for 4Q was driven by a 29% decrease in closings to 4,405 homes. That was partially offset by a 2% increase in average selling price to $262,000. Before taxes, Pulte recorded a net loss of $148.3 million in the fourth quarter attributable to its homebuilding sector and a net income of $5.3 million attributable to its financial services sector. The firm improved on a yearly basis by narrowing its pre-tax loss from homebuilding to $1.17 billion and swinging into the black in financial services at $5.6 million. Mortgage originations dropped by 34% in the fourth quarter to 2.8 million or $600 million. For the fiscal year, origination volume remained stable at abut 10.8 million accounting for $2.3 billion worth of loans. As of Dec. 31, PulteGroup held almost $7.7 billion worth of assets on its balance sheet. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. Disclosure: The author holds no relevant investments.