Pulte Homes posted weak Q4 results all around: A loss of $0.03 per share or $34 million pretax, versus $0.10 forecasts, including $350 million in land writedowns. Revenues were down 15% to $4.39 billion, vs. $5b in '05. Gross margins fell to 11% from 22.3% last year. New home orders declined 34% to 6,446. Full year earnings fell to $14.3b ($2.67/share), compared with $5.47 in 2005. Some silver linings -- a 7% average selling price increase to $337,000; a slight decline in cancellations from Q3 (35.8%) to Q4 (34.7%); and PHM's improved financial services revenues -- $59.7 million in Q4'06, up from $52.5 million in Q4'05. Which prompted CEO Richard Dugas to note, "promising signs of stabilization… although it's too early to tell how strong and sustainable this may be." PHM withheld 2007 guidance, but sees Q1 EPS of breakeven to a loss of $0.10.
Sources: Press Release, The Street, Chron.com, Trading Markets,Bloomberg, MSN, Market Watch
Commentary: Homebuilder Stocks: Is the Worst Over? • The Real Reason to Avoid Homebuilders • Assessing the Homebuilder Stocks
Stocks/ETFs to watch: Pulte Homes Inc. (NYSE:PHM). Competitors: Centex Corp. (CTX), D.R. Horton Inc. (NYSE:DHI), Lennar Corp. (NYSE:LEN), Toll Brothers Inc. (NYSE:TOL). ETFs: iShares Dow Jones U.S. Home Construction (NYSEARCA:ITB), PowerShares Dynamic Building & Construction (NYSEARCA:PKB), SPDR Homebuilders (NYSEARCA:XHB)
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