PulteGroup (PHM) Q2 2024 earnings summary

Executive summary

• Q2 2024 earnings per share reached a record $3.83, up 19% year-over-year, with net income rising 12% to $809 million, driven by higher closings, average sales price, and gross margin.

• Home sale revenues increased 10% to $4.4 billion, with closings up 8% to 8,097 homes and average sales price up 2% to $549,000.

• Net new orders declined 4% year-over-year to 7,649 homes, but order value rose 2% due to higher average selling prices in some regions.

• Maintained focus on liquidity, shareholder returns, and disciplined capital allocation amid evolving market conditions.

• Return on equity reached 27.1% for the trailing 12 months.

Financial highlights

• Gross margin improved by 30 basis points year-over-year to 29.9%, aided by favorable mix and reduced incentives.

• SG&A expense was $361 million (8.1% of revenues), including a $52 million pre-tax insurance benefit.

• Financial services pre-tax income rose 36% to $63 million, with mortgage capture rate at 86%.

• Effective tax rate was 22.8%, benefiting from energy tax credits and favorable state tax resolution.

• Cash and equivalents at quarter-end were $1.4 billion; debt-to-capital ratio improved to 12.8%.

Outlook and guidance

• Expect to close 31,000 homes in 2024, with Q3 and Q4 closings projected at 7,400–7,800 homes per quarter.

• Average sales price guidance for Q3 and Q4 remains $540,000–$550,000.

• Gross margin expected at ~29% in Q3 and 28.5–29% in Q4, reflecting mix and competitive incentives.

• Multi-year growth target of 5–10% annually reaffirmed, with long-term demand supported by structural housing shortage.

• On track to invest approximately $5 billion in land acquisition and development in 2024.