Pulte posts bigger-than-expected quarterly loss
NEW YORK - Pulte Homes Inc reported a larger-than-expected fourth-quarter net loss on Tuesday despite help from a tax benefit, sending its shares lower.
The largest U.S. builder's net loss narrowed to $116.9 million, or 31 cents per share, from $338.2 million, or $1.33 per share, a year earlier. Analysts on average were expecting a loss of 19 cents per share, according to Thomson Reuters I/B/E/S.
Excluding one-time charges and benefits, Pulte said it operated at roughly break-even in the quarter.
The company recorded $925 million in charges, including a $563 million goodwill writeoff from its 2009 purchase of Centex Corp.
Most of the charges were offset by $800 million in income tax benefits stemming from the extension of a federal law that allows companies to apply losses to prior income.
The Centex acquisition gave Pulte land assets that it says are an important resource as prices rise and some markets face lot shortages.
One of the strategic pillars to the deal was acquiring Centex' 56,000 lots, said Chief Executive Richard Dugas during a conference call with analysts. I think everyone is getting a better appreciation for the current land environment and the limited availability of well-positioned finished lots.
The downside: Such a huge land position also carries the risk of impairment charges as values fluctuate during the protracted housing downturn.
Pulte also affirmed its target of acquisition-related savings of $440 million on an annualized basis by the end of 2010.
Revenue rose 5 percent to $1.7 billion, beating analysts' estimates of $1.5 billion, as closings increased 13 percent to 6,200 homes. Orders more than doubled to 3,748 homes, above JPMorgan analyst Michael Rehaut's estimate for a 94 percent increase.
We believe Pulte's orders and core margins are consistent with our outlook for demand to continue to stabilize if not slowly re-emerge, Rehaut wrote in a note to clients. He has a neutral rating on Pulte shares.
The Bloomfield Hills, Michigan-based company has operations in 29 states. It became the biggest builder in the United States by acquiring Centex, knocking D.R. Horton Inc out of the No. 1 spot.
Pulte shares were down 2.4 percent at $10.86 in morning New York Stock Exchange trading.
(Reporting by Helen Chernikoff; Editing by Lisa Von Ahn and John Wallace)