Tuesday, April 27, 2004 | 10:39 a.m.
SUN STAFF AND WIRE REPORTS
BLOOMFIELD HILLS, Mich. -- Pulte Homes Inc., the fourth-largest U.S. homebuilder by stock market value and a big player in Las Vegas, on Monday said first-quarter profit jumped 53 percent as falling mortgage rates spurred more people to buy new houses.
Profit from continuing operations was $131.8 million, or First $1.02 cents a share, from $86.3 million, or 70 cents, a year earlier, the Bloomfield Hills, Mich.-based company said in a statement. Analysts expected the company to earn 85 cents, based on the median of 11 estimates in a Thomson Financial poll.
Pulte and competitors such as D.R. Horton Inc. and Lennar Corp., the largest homebuilder by stock market value, are expected by Fannie Mae to sell a record number of homes in the United States this year, as mortgage rates rise more slowly than some economists had expected and job growth picks up. New-home sales reached a record pace in March, according to a government report.
"I don't think the housing business gets any better than where it is now," said Sam Lieber, chief executive of Alpine Management & Research, which holds 275,000 Pulte shares. "Even if we see a moderate rise in interest rates, as most people expect, the industry has enough muscle to continue to grab market share from the private builders."
Pulte sold 7,039 homes in the United States during the quarter, 22 percent more than a year earlier, pushing up consolidated revenue 31 percent to $2.04 billion. The average price of a Pulte home rose 10 percent to $276,000.
In addition, the builder took orders for 10,751 homes, an increase of 31 percent. The backlog of homes ordered and not yet delivered was 17,664 units at the end of the quarter, valued at $5.36 billion, from 13,053 homes valued at $3.56 billion.
In the West the number of net new orders were 4,205 during the first quarter, a 30 percent increase over the year-ago quarter.
The backlog of homes ordered and not yet delivered in the West was 7,271 homes during the first quarter, a 47 percent increase over the year-ago quarter.
In the Las Vegas area, Pulte Homes and its Del Webb division closed escrow on 2,717 homes in 2003 compared with 2,119 in 2002, Home Builders Research Inc. reported.
The company raised its earnings estimate for 2004 to $7 to $7.25 a share from $6 to $6.25.
In the first three months of the year, the average 30-year fixed rate averaged 5.6 percent, the second lowest on record following 5.5 percent in the second quarter of 2003, according to Fannie Mae data.
In a report released by the Commerce Department Monday, the annualized rate of new-home sales reached a higher-than-expected 1.228 million in March. Economists had called for 1.173 million, according to the median of 56 estimates in a Bloomberg survey.
This year it's likely that 1.088 million new houses will sell in the U.S., surpassing last year's record of 1.087 sales, according to David Berson, chief economist at Fannie Mae, the largest U.S. mortgage financier.
Pulte, the largest U.S. builder of retirement homes under its Del Webb and Sun City brands, constructs homes in 27 states as well as Puerto Rico, Argentina and Mexico. International sales rose to 1,601 homes in the quarter from 1,191 a year earlier.
Shares of Pulte rose 72 cents, or 1.5 percent, to $49.03 as of 4 p.m. Monday in composite trading on the New York Stock Exchange. They are up 4.7 percent this year and advanced again this morning, trading up $2.89, or 5.9 percent, at $51.92.
Bloomberg News
contributed to this story.
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