Yahoo Finance Higher Pricing, Deliveries to Aid PulteGroup (PHM) Q3 Earnings
PulteGroup, Inc.’s PHM Homebuilding segment — accounting for 97% of total revenues — is expected to have registered growth, given strong housing market fundamentals in the United States. Consequently, the segment is likely to contribute to overall revenues when it reports third-quarter 2021 results on Oct 26.
The company has exhibited a solid performance so far this year, with the stock climbing 16.2% compared with the Zacks Building Products - Home Builders industry’s 17.3% rally. PulteGroup has been riding high on its focus on entry-level buyers and protecting liquidity, prudent management of cash flows as well as land investment strategy. Yet, supply chain issues may have been a concern.
Click here to know how the company’s overall Q3 performance is expected to be.
A Look at Q3 Segmental Performance
PulteGroup’s Homebuilding segment is expected to have registered growth, courtesy of higher deliveries and average selling price or ASP.
The Zacks Consensus Estimate for Homebuilding revenues of $3.46 billion suggests a 21.3% increase on a year-over-year basis.
The company expects ASP within $470,000-$475,000, indicating an increase from $438,000 registered a year ago. It expects deliveries within 7,300-7,600 homes. At the midpoint, the guided range indicates an increase of 15% from 6,454 units in the year-ago period.
The consensus mark for ASP is $473,000, which points to an 8% year-over-year improvement. For the quarter to be reported, the consensus mark for the number of homes closed is 7,243, which points to 12.2% year-over-year growth.
Solid demand arising from the prospering U.S. housing market scenario, prudent land investment strategy and focus on entry-level buyers is expected to have benefited PulteGroup in the third quarter. Yet, the company has been witnessing supply chain challenges, resulting in construction-related delays. The labor market tightened with limited availability of labor, arresting the rapid growth in housing production. These headwinds might have impacted the company’s top line to some extent.
Overall Q3 Earnings & Revenue Expectations
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.83 per share, indicating 36.6% growth from the year-ago figure of $1.34. Also, the consensus mark for revenues is $3.51 billion, suggesting 19% year-over-year growth.
PulteGroup, Inc. Price and EPS Surprise
PulteGroup, Inc. price-eps-surprise | PulteGroup, Inc. Quote
PulteGroup — a Zacks Rank #3 (Hold) company — surpassed earnings estimates in 18 of the trailing 19 quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Construction Stocks to Bet On
Some better-ranked stocks in the broader construction space include Toll Brothers Inc. TOL, KBR, Inc. KBR and Quanta Services Inc. PWR. While Toll Brothers sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy).
Toll Brothers, KBR, and Quanta are likely to register an earnings growth rate of 80%, 24.9%, and 21.5% year over year, respectively, in 2021.
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