Pulte Homes Q2 loss narrows

(RTTNews) - Pulte Homes Inc. (PHM | Quote | Chart | News | PowerRating) said Wednesday after the markets closed that its second quarter loss narrowed from last year, as the third largest U.S. homebuilder recorded lower inventory impairments and land-related charges. The company's quarterly loss per share also came in narrower than analysts' consensus estimate.

The Bloomfield Hills, Michigan-based company reported a net loss of $158.4 million or $0.63 per share, compared to a net loss of $507.6 million or $2.01 per share for the year-ago quarter.

The latest quarter results included $220.1 million of pre-tax charges related to inventory impairments and other land-related charges as well as a tax benefit of $56.8 million. The year-ago quarter results included inventory impairments and land-related charges of $749.4 million.

On average, 12 analysts polled by First Call / Thomson Financial expected the company to report a loss of $0.69 per share for the second quarter.

Total revenue for the second quarter fell 20% to $1.63 billion from $2.02 billion in the same quarter last year. Eight analysts had a consensus revenue estimate of $1.56 billion for the second quarter.

Second quarter homebuilding revenue dropped 18% to $1.6 billion from $1.9 billion a year ago, reflecting an 8% fall in closings to 5,438 homes and an 11% decrease in average selling price to $286,000.

"The operating environment for homebuilding continued to deteriorate during the second quarter of 2008," said Richard Dugas, Jr., President and CEO of Pulte Homes. "The downward trend in home prices persisted, and the softness in overall buyer demand remained a challenge for the industry, leading to unsold inventory for both new and existing homes still well above historical levels. Buyer confidence remains under pressure, both from the weakness in housing as well as concerns about the overall economy.

On June 25, the U.S. Commerce Department said new home sales fell 2.5% to a seasonally adjusted annual rate of 512,000 units in May from the revised April rate of 525,000 units.

The U.S. housing market has been in decline since July 2006, when excessive building and loose credit standards triggered a drop in prices and a wave of foreclosures. As prices have dropped, home builders have marked down the value of inventory on their books.

Net new home orders for the second quarter fell 32% from a year earlier to 5,133 homes. In dollar terms, net new home orders for the second quarter dropped 42% to $1.4 billion.

Pulte Homes ended the quarter with a backlog of 8,254 homes valued at $2.4 billion, compared to a backlog of 14,928 homes valued at $5.2 billion at the end of last year's second quarter.

During the quarter, the company paid off $313 million of its senior notes due 2009 during a recent tender offer, and had no debt outstanding under its $1.6 billion revolving credit facility at quarter end. The company ended the quarter with a $1 billion cash balance.

For the first six months of 2008, the company reported net loss of $854.6 million or $3.37 per share, compared to a net loss of $593.2 million or $2.35 per share for the same period last year.

Total revenues for the first-half fell 21% to $3.07 billion from $3.89 billion in the prior year period.

Looking forward, the company said it expects third quarter results to range from a net loss of $0.15 per share to breakeven from continuing operations, exclusive of a tax benefit and any additional impairments or land-related charges. Analysts currently expect the company to report a loss of $0.43 per share for the third quarter.

Pulte Homes also said it targets 2008 year-end cash position of $1.7 billion to $1.9 billion.

Another homebuilder Ryland Group Inc (RYL | Quote | Chart | News | PowerRating) today reported a wider second quarter loss that widely missed analyst estimates, citing write-offs, impairments and a charge. The company reported a net loss for the second quarter of $241.6 million or $5.70 per share, compared to a net loss of $52.4 million or $1.25 per share for the year-ago quarter. Total revenues for the second quarter fell 34.4% to $487.9 million $743.7 million a year ago. Analysts expected the company to report a loss of $0.79 per share on revenues of $492.99 million.

NVR Inc. (NVR | Quote | Chart | News | PowerRating) yesterday reported a 43% drop in second quarter earnings on 27% drop in revenue.

Pulte Homes shares, which have traded in a range of $8.20 to $24.25 over the past year, closed Wednesday's regular trading session at $12.81, up 35 cents or 2.81% and gained an additional 49 cents or 3.83% in after hours trading.

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