Seeking Alpha
Profile| Send Message|
( followers)  

Pulte Homes said Tuesday it expects to report a loss of $2.00-2.10/share for its second quarter amid worsening conditions in the U.S. homebuilding market. Net new orders during the period fell 20% from 2006 to 7,532, the homebuilder said, while the average sales price per home decreased 4% to approximately $320,000. Pulte said it closed 5,938 homes during the quarter, 40% fewer than the prior-year quarter. "The difficult conditions that plagued the homebuilding industry in the first quarter of 2007 worsened in the second quarter, with increased competitive pricing pressures, elevated levels of new and resale home inventory, and weak consumer sentiment for housing affecting the entire industry," said CEO Richard J. Dugas Jr. Pulte expects that impairments and land-related charges during the quarter will be in the range of $740-770 million on a pre-tax basis ($1.85-1.92/share after-tax). The results also reflect a $40 million ($0.10/share) charge for a restructuring plan announced May 29 designed to PHM 18 07 2007 Chartreduce costs and improve operating efficiencies. Pulte had previously had forecast Q2 results of break-even to -$0.10 exclusive of impairments, land-related charges and restructuring. Analysts had been expecting an $0.18/share loss. J.P. Morgan analyst Michael Rehaut called the "magnitude of charges disappointing, but similar to other builders on a percent of equity." Fellow homebuilders such D.R. Horton, KB Home, Lennar and Ryland also have warned of worsening conditions in the market over the last few months. The company expects to post final Q2 numbers on July 25.

Sources: Press release, AP, TheStreet.com, Dow Jones
Commentary: Pulte Homes Cuts Another 16% of Its Workforce25 Good Short CandidatesIs It Time to Buy the Homebuilders? 13 Stocks to Consider
Stocks/ETFs to watch: Pulte Homes Inc. (NYSE:PHM). Competitors: D.R. Horton Inc. (NYSE:DHI), Centex Corp. (CTX), Hovnanian Enterprises Inc. (NYSE:HOV), KB Home (NYSE:KBH), Ryland Group Inc.(NYSE:RYL). ETFs: streetTRACKS SPDR Homebuilders ETF (NYSEARCA:XHB), iShares Dow Jones US Home Construction (NYSEARCA:ITB)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Source: Pulte Homes Warns of Worse Than Expected Q2 Loss