Pulte Homes (NYSE: PHM) after market close Wednesday reported a net loss for its third quarter of $280.4 million (-$1.11 per share), compared with a $787.9 million (-$3.12 per share) net loss for the prior year third quarter.The loss was more than twice what analysts were expecting.
The loss included $266.6 million of pre-tax charges related to inventory impairments and other land-related charges, down from $842 million in last year's third quarter.
Consolidated revenues for the quarter were $1.6 billion, a decline of 37% from last year's third quarter. Home building revenues were also down 37% to$1.5 billion on a 28% decrease in closings to 5,377 homes and a 13% decrease in average selling price to $281,000.
Net new home orders for the third quarter were down 34% to 3,008 homes, and ending backlog as of September 30, 2008 was valued at $1.7 billion (5,885 homes), compared with a value of $4.1 billion (12,042 homes) at the end of last year's third quarter.
The company did not report the cancellation rate for the quarter.
"The home building operating environment significantly worsened during the third quarter of 2008," said Richard J. Dugas, Jr., president and CEO of Pulte. "Uncertainty and volatility in the capital markets, higher unemployment, and a weaker economy provided further downward pressure on the housing market. These factors caused buyer confidence to decline even more during the period, as many potential home buyers remain on the sidelines."
The company ended the quarter with a $1.2 billion cash balance and no debt outstanding under its revolving credit facility. Home building SG&A was down 19%, a decrease of $44.6 million, compared with the prior year quarter.
The $266.6 million in charges to earnings included $250.3 million related to land impairments, $15.9 million of impairments of land held for sale and$1.4 million related to Pulte's investment in unconsolidated joint ventures.
The company's mortgage unit reported pre-tax income of $10.1 million for the quarter 2008, down from $12.9 million for the prior year's quarter, due primarily to a 37% decline in mortgage loans originated partially offset by a shift in the mix of mortgage loans closed toward more profitable agency-backed products. The mortgage capture rate for the quarter was 93%, compared with 92% for the same quarter last year.
According to Dugas, Pulte was cash-flow positive for the quarter and ended with a $1.2 billion cash balance and no debt on its revolver. Its debt-to-capitalization ratio was 49.9% (38.5% on a net debt-to-capitalization basis).
"As this industry downturn persists, Pulte remains focused on its goals of cash generation, reducing its overall cost structure, and managing its inventory levels," said Dugas. He also said the company would suspend guidance for the fourth quarter, adding that the company is "targeting a cash position by the end of 2008 of $1.6 billion to $1.8 billion."
Pulte shares were down another 4.5% at $9.50 in after-hours trading after falling 5.7% during the trading day Wednesday.