PulteGroup's net income increased 1.8% to $639 million in the third quarter of 2023, company reported. The home sale revenues upped 3% over the prior year to $3.9 billion. Higher revenues for the period were driven primarily by a 2% increase in the average sales price of homes closed to $549,000, as closings increased by less than 1% to 7,076 homes.
For its third quarter, the company reported home sale gross margin of 29.5%, compared with prior year gross margin of 30.5%. Homebuilding SG&A expense for the period was $353 million, or 9.1% of home sale revenues compared with $350 million, or 9.2% in the prior year period.
In the third quarter, the company’s net new orders increased 43% over the prior year to 7,065 homes. The value of net new orders in the period increased 36% over last year to $3.8 billion. The company’s average community count for the third quarter was 923, which is up 12% from the comparable prior year period. The company’s unit backlog at the end of the third quarter was 13,547 homes with a value of $8.1 billion.
“PulteGroup’s third quarter results show a continuation of recent positive trends, as top line revenue growth combined with strong margin performance drove record third quarter earnings of $2.90 per share,” said Ryan Marshall, PulteGroup President and CEO. “Earnings growth and disciplined balance sheet management allowed the company to realize a return on equity of 30.1%, while using the resulting cash flows to invest in our business, to repurchase $300 million of common shares, to retire $65 million of senior notes and to further strengthen our overall liquidity profile.”
“Fed actions and broader market forces have combined to push interest rates to 20-year highs, but the fundamental desire for homeownership is strong while the supply of houses remains constrained,” added Mr. Marshall. “PulteGroup’s ability to offer a variety of locations, price points, floor plans and incentive packages allows us to meet consumer needs while helping to address the affordability challenges caused by today’s higher rates.”
Third quarter pre-tax income for the company's financial services operations increased 5% over the prior year to $29 million. Mortgage capture rate for the third quarter was 84%, up from 77% last year. The company’s third quarter pre-tax income totaled $847 million, which is an increase of 4% over the prior year. Income tax expense for the third quarter was $209 million, or an effective tax rate of 24.6%.
