Pulte Homes (NYSE:PHM) late Wednesday reported a net loss for 2008's second quarter of $158.4 million (-$0.63) per share, compared with a $507.6 million net loss for the prior year second quarter, primarily due to $220.1 million of pre-tax charges related to inventory impairments and other land-related charges. The charges were far less than the prior year's second quarter write down of $749.4 million.
The second quarter results also included a tax benefit of $56.8 million, primarily due to an adjustment in Pulte's deferred income tax assets.
Consolidated revenues for the quarter were $1.6 billion, a decline of 20% from the same period last year. Revenues from home building settlements in the second quarter decreased 18% to $1.6 billion as closings fell 8% to5,438 homes and an the average selling price fell 11% decrease to $286,000.
Net new home orders fell 32% to 5,133 homes with a value of $1.4 billion, a 42% decline. Backlog as of June 30, 2008 was valued at $2.4 billion (8,254 homes), compared with a value of $5.2 billion (14,928 homes) at the end of last year's second quarter.
At the end of the second quarter 2008, the Company's debt-to-capitalization ratio was 48%, and on a net debt-to-capitalization basis was 39%. Home building SG&A expense decreased $118 million, or 40%, compared with the prior year quarter. Pulte ended the quarter with $1 Billion in cash after paying off $313 million in debt related to a recent tender offer.
The impairments included $153.6 million related to land impairments, $20.1 million associated with the write-off of land deposits and pre-acquisition costs, $44.7 million of impairments of land held for sale and $1.7 million related to the Company's investment in unconsolidated joint ventures.
The financial services operations reported pre-tax income of $10.8 million for the second quarter 2008, compared with $6.6 million of the prior year's quarter. The company said the increase was due in part to a shift in the mix of mortgage loans closed toward more profitable agency-backed products, which itself was partially offset by a 26% decline in mortgage loans originated during the quarter compared with the prior year quarter. The mortgage capture rate for the quarter was 92%.
"The operating environment for homebuilding continued to deteriorate during the second quarter of 2008," said Richard J. Dugas, Jr., president and CEO. "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."
The company provided third-quarter guidance of earnings minus write-downs of between a loss of 15 cents a share and breakeven and projected an end-of-the-year cash position of between $1.7 and $1.9 billion.