Pulte Homes Inc. (PHM) Tuesday said fourth-quarter net loss narrowed from the previous year, helped by income tax benefits. Home sales increased over 5% in the just concluded quarter, while average selling price declined from last year. New orders in the quarter more than doubled partly due to the acquisition of Centex Corp.
The Bloomfield Hills, Michigan-based company's fourth-quarter net loss narrowed to $116.90 million or $0.31 per share from $338.17 million or $1.33 per share in the previous year.
Results of the just concluded quarter included charges totaling $925 million. The company recorded goodwill impairment charges of $563 million, land-related charges of $280 million, merger-related charges of $45 million and mortgage repurchase reserve charges of $37 million.
These charges were partially offset by $800 million in income tax benefits related to recently enacted tax legislation that extended the carryback period of net operating losses from two years to five years. The company expects to receive a federal tax refund of $917 million due to the new tax legislation.
In the previous year, results included goodwill impairments and land-related charges of $386 million and an income tax benefit of $142 million.
The company noted that excluding the impact of significant charges and benefits recorded in the period, operating results were approximately breakeven for the quarter.
On average, 13 analysts polled by Thomson Reuters expected the company to lose $0.19 per share in the quarter. Analysts' estimates typically exclude special items.
In the third quarter, the company reported a net loss of $361.4 million or $1.15 per share.
Total revenues for the quarter increased to $1.731 billion from $1.644 billion in the prior year. Analysts expected revenues of $1.50 billion. The company's third-quarter revenues were $1.09 billion.
Homebuilding revenues rose to $1.687 billion from $1.612 billion. Home sales generated $1.597 billion, compared to $1.520 billion last year. Revenue from Land sales slipped to $89.51 million from $91.78 million in the prior year.
The segment's other expense surged to $607.79 million from $36.06 million due to an impairment charge related to the merger with Centex Corp., resulting in a pre-tax loss of $866.78 million, which widened from $466.29 million in the prior year.
It was on August 18, 2009, that Pulte Homes completed its merger with Centex.
Fourth-quarter revenue from Financial Services grew to $44.25 million from last year's $32.15 million. The division reported a pre-tax loss of $36.31 million, compared to $7.89 million loss last year.
Pulte's income tax benefit in the just concluded quarter increased to $800.33 million from $141.56 million in the prior year.
Fourth quarter 2009 net new home orders, inclusive of Centex operations for the entire period, increased to 3,748 homes from 1,763 homes in the previous year. Fourth-quarter closings increased 13% to 6,200 homes.
New home orders have increased for homebuilders in general as the government has facilitated a tax credit to spur demand for homes. The tax credit is $8,000 for qualified first-time home buyers purchasing a principal residence between January 1, 2009 and April 30, 2010.
The company's reported quarter-end backlog as of December 31, 2009, was 5,931 homes, valued at $1.6 billion. Backlog for the fourth quarter 2008 was 2,174 homes, valued at $631 million.
During the quarter, average selling price dropped to $258 thousand from last year's $278 thousand.
Net loss for 2009 narrowed to $1.183 billion or $3.75 per share from $1.473 billion or $5.81 per share in the previous year. For the full year, revenues declined to $4.084 billion from $6.263 billion in the prior year. Wall Street expected a loss of $3.73 per share in 2009 on revenues of $3.91 billion.
Richard Dugas, Jr., chairman, president and CEO of Pulte Homes, said today, ''We remain on track to capture targeted synergies and savings of $440 million on an annualized basis by the end of 2010, while Centex's land assets are proving to be an important resource in a market facing a limited supply of well-positioned homebuilding lots. Finally, with $1.9 billion in cash on our balance sheet and a pending tax refund, we have ample liquidity to manage our operations."
Among others in the industry, Lennar Corp. (LEN, LEN.B) last month reported a profit for the fourth quarter, compared to a heavy loss last year, as the company recorded an income tax benefit for the period. Total revenues for the quarter declined 29% from last year due to lower home deliveries and average selling prices, but the company said its new orders increased 3%.
D.R. Horton, Inc. (DHI) last week reported a profit for the first quarter, as homebuilding revenue increased 23% from last year, and the company recorded a hefty tax benefit.
PHM closed Monday's regular trade at $11.13, up from the previous close of $10.88, on 10.09 million shares.
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