PulteGroup Surpasses Q3 Earnings Expectations, But Stock Drops 6%

PulteGroup (NYSE:PHM) reported stronger-than-expected third-quarter profits, benefiting from a surge in demand for new homes as the supply of existing homes remained tight. But, the company’s shares dropped more than 6% intra-day today.

With many U.S. homeowners opting to hold onto their lower mortgage rates secured during periods of cheaper borrowing, the housing market has seen a notable shortage of resale inventory, pushing prospective buyers toward newly built homes despite rising prices.

For the quarter, PulteGroup posted net income of $698 million, a 9.3% increase year-over-year. This resulted in diluted earnings per share of $3.35, exceeding the consensus estimates. Revenue also grew by 11.8% to $4.48 billion, outperforming expectations.

The company's performance was fueled by a 12% increase in completed home sales, with 7,924 units sold during the quarter. The average selling price remained steady at $548,000 compared to the previous year. Additionally, PulteGroup saw a 3% rise in net new orders, valued at $3.9 billion.