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Housing

Pulte Sets New Bar For Builders (PHM, XHB, ITB)

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By Jon C. Ogg Updated Published
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PulteGroup, Inc. (NYSE: PHM) is often thought of by many as the bogey of the US Homebuilding sector.  If so,  the company is giving a forecast that might mean profits in 2010 despite a small loss reported.  The builder said its loss narrowed to -$0.03 EPS rather than estimates from Thomson Reuters of -$0.22 EPS.  PulteGroup’s loss a year ago was a whopping -$2.02 EPS on a loss of $514.8 million.  What a difference time can make.

The builder said that it recorded fewer impairment charges and said its land-cost writedowns were lower.  Here is the most important notion of all and it may set a new hurdle for other homebuilders to keep up their share price performance: Pulte believes that it is in the position to be profitable this year.  Thomson Reuters expects a loss at -$0.43 EPS, and the profit expectation for 2011 is $0.33 EPS.

At a $13.10 close on Tuesday, its 52-week range is $7.84 to $13.91…. At 8:15 AM EST we have shares trading up around $13.20 rather than through the roof.  Much of the news may have already been in the stock.

SPDR S&P Homebuilders (NYSE: XHB) closed at $18.86 yesterday and will be one to watch. More importantly and more directly is the iShares Dow Jones US Home Construction (NYSE: ITB) ETF, where Pulte is over 10% of the weighting.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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