Yahoo Finance PulteGroup (PHM) Gears Up for Q1 Earnings: What's in Store?
PulteGroup Inc. PHM is scheduled to report first-quarter 2023 results on Apr 25, before the opening bell.
In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 26% and 12.3%, respectively. Earnings and revenues increased 45% and 13.4% on a year-over-year basis, respectively.
Notably, PHM surpassed earnings estimates in 22 of the trailing 25 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $1.78 from $1.79 per share over the past 60 days. The estimated figure indicates a 2.7% decrease from the year-ago earnings of $1.83 per share. Also, the consensus mark for revenues is $3.27 million, suggesting 2.5% year-over-year growth.
PulteGroup, Inc. Price and EPS Surprise
PulteGroup, Inc. price-eps-surprise | PulteGroup, Inc. Quote
Factors to Note
The uncertain economic scenario has been prompting moderation in housing demand. Additionally, higher rates, continued supply-chain issues, material cost inflation and higher wages are making the U.S. housing market less affordable. The company’s earnings and revenues are expected to have declined in the quarter due to the above-mentioned challenges.
Nonetheless, PulteGroup’s execution of initiatives to boost profitability, with a focus on entry-level homes, prudent land investment strategy and affordable product offerings, are expected to have offset the negatives to some extent.
PulteGroup expects home deliveries of 5,400-5,700, indicating a decline from the 6,039 reported a year ago. The decrease reflects the challenging sales environment and higher cancelation rates. The company expects a higher average selling price or ASP of $565,000-$575,000 for the quarter, suggesting an increase of 12% from that reported a year ago.
We expect Homebuilding revenues to increase 3% to $3.19 billion from $3.1 billion a year ago, courtesy of higher ASP.
From the margin perspective, input cost inflation and high costs associated with labor and transportation are expected to have weighed on margins to some extent. That said, higher pricing and prudent cost-saving efforts are likely to have mitigated the risks.
The company expects the homebuilding gross margin to contract 200 basis points to 27% for first-quarter 2023 from the year-ago period's reported figure.
PulteGroup anticipates SG&A (as a percentage of home sales revenues) of 10.5-11%, whereas it reported 10.7% in the prior year.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for PulteGroup for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: PHM has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
EMCOR Group EME has an Earnings ESP of +0.27% and carries a Zacks Rank #2 at present.
EME’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to grow 32.4% year over year.
United Rentals, Inc. URI currently has an Earnings ESP of +4.51% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings of URI topped the consensus mark in three of the last four quarters and missed on one occasion, the average surprise being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.
Howmet Aerospace Inc. HWM has an Earnings ESP of +0.88% and carries a Zacks Rank #3.
HWM’s earnings topped the consensus mark in three of the last four quarters but met on one occasion, the average negative surprise being 3.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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PulteGroup, Inc. (PHM) : Free Stock Analysis Report
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
United Rentals, Inc. (URI) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
