PulteGroup announced financial results for its second quarter ended June 30, 2016. Reported net income was $118 million, or $0.34 per share.
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This included pretax charges of $15 million, or $0.03 per share, associated with the termination of certain pending land transactions and recognition of final costs associated with its corporate relocation.
Prior year net income of $103 million, or $0.28 per share, included a pretax benefit of $27 million, or $0.05 per share, resulting from a legal settlement realized in the period.
Home sale revenues for the second quarter increased 41% over the prior year to $1.8 billion. Higher revenues for the period were driven by a 27% increase in deliveries to 4,772 homes, combined with an 11% increase in average selling price to $367,000.
The company's second quarter home sale gross margin was 21.5%, which is in line with Company guidance. Margins for the quarter were reduced by approximately 70 basis points as a result of closings associated with the Company's purchase of substantially all of the assets of John Wieland Homes and Communities in January 2016.
Homebuilding SG&A expense for the quarter was $192 million, or 11.0% of home sale revenues. Prior year SG&A of $130 million, or 10.5% of home sale revenues, included a benefit of $27 million relating to a legal settlement realized in the period.
The value of net new orders in the second quarter increased 21% to $2.1 billion. On a unit basis, net new orders for the period increased 11% to 5,697 homes. The company operated out of 700 communities in the quarter, an increase of 11% from the second quarter of 2015.
Backlog value increased 21% over the prior year to $3.7 billion, while the number of homes in backlog increased 8% to 9,679 homes. The average price of homes in backlog was $387,000, which is up 13% over last year and up 5% from the average selling price of homes delivered in the current quarter.
The company's financial services operations reported second quarter pretax income of $17 million compared with $10 million in 2015. Higher pretax income for the period was the result of higher closing volumes in the Company's homebuilding operations and a favorable interest rate environment.
Mortgage capture rate for the quarter was 81%, compared with 83% in the prior year.
During the quarter, PulteGroup repurchased 2.6 million common shares for $48 million, or an average price of $18.53 per share. The company also used available cash to retire $465 million of bonds which matured during the second quarter.
PulteGroup announced today that its Board approved increasing its existing share repurchase authorization by $1.0 billion, bringing the total authorization to $1.5 billion. ■