Pulte profit grows

Jennifer Shubinski

Thursday, Oct. 23, 2003 | 11:09 a.m.

Nevada is one of the strongest markets for home-building giant Pulte Homes, which saw a 37 percent increase in its profit for the third quarter.

Pulte, based in Bloomfield Hills, Mich., on Wednesday reported a profit of $168.9 million, or $2.69 a share, up from $123.4 million, or $1.99 a share, in the year-ago quarter.

Revenue grew 29 percent to $2.4 billion.

Pulte is the fourth-largest U.S. homebuilder by stock market value and it's the second-largest by volume in Southern Nevada.

Besides reporting strong earnings Wednesday, Pulte boosted its 2003 earnings forecast.

The company raised its guidance for fiscal 2003 to $9.50 to $9.75 a share from $9.00 to $9.25. Analysts had expected the company to earn $9.15 this year.

Pulte sold 8,637 homes in the United States during the quarter, 19 percent more than a year earlier. Orders advanced 14 percent to 9,100, while the backlog of homes ordered and not yet delivered jumped 22 percent to 16,646 units.

The West had the largest number of backlogs, 6,454 homes, compared to 4,353 in the Southeast and 5,839 homes in the rest of the country, the company said.

The company attributed the improved results to expanding market share through customer segmentation. Pulte builds houses for first-time home buyers, and first and second move-up buyers. It also sells homes in age-restricted communities through its Del Webb division.

Steve Petruska, area president for Pulte Homes' Arizona and Nevada operations, said Nevada, and particularly Southern Nevada, is one of the strongest housing markets in the country.

"Number one, (Nevada) is one of the few states that's seen positive job growth and number two, we have a very constrained land supply, and so that excess demand is driving absorption," he said.

"It's been a real growth year for us," he said. "It's been fueled by the growth up in Aliante (in North Las Vegas), which has been a really successful community."

Petruska was promoted this month to vice president and chief operating officer at Pulte's headquarters, effective Jan. 1. Sheryl Palmer, who is now with Del Webb in Phoenix, will relocate to Las Vegas to replace Petruska at the beginning of the year.

Pulte is looking to build more attached homes and condominiums in the Las Vegas area in the future, Petruska said. Currently Pulte is building upscale town homes in Summerlin and is under contract at Aliante to build age-restricted attached homes.

"It will be a bigger part of our business as we move forward," he said.

In 2002, Pulte along with Del Webb closed escrow on 2,119 homes in the Las Vegas area, Home Builders Research Inc. reported.

Dennis Smith, president of the research firm, said the home builder might close up to 2,600 homes this year.

Del Web announced this month it plans to build an age-restricted community in Reno, but no homes have been built yet.

Pulte recently opened Anthem Highlands in the south part of the Las Vegas Valley, and Petruska said the community should start generating closings by the end of the year.

Bloomberg News

contributed to this report.