Pulte Pares 1Q Loss And Now Expects Profit In 2010
LOS ANGELES (AP) â¿¿ PulteGroup Inc., the nation's largest homebuilder, said Wednesday it slashed its loss in the first quarter and forecast it would be profitable this year.
That would mark a major turning point for the company, which has posted a loss now for 14 consecutive quarters as the worst housing downturn in decades unfolded.
But management struck a confident tone Wednesday, saying it expects improved sales and fewer profit-destroying write-downs this year.Assuming the housing industry remains stable, the company will remain profitable this year, said PulteGroup CEO Richard Dugas. He credited a more stable backlog of home orders and additional savings from its takeover of rival Centex Corp. last year. "The expected benefits from last year's merger with Centex are clearly evident in the numbers," Dugas said. The combine company now has operations in 29 states and its Del Webb brand is the nation's largest builder of communities for adults age 55 and over. Still, Dugas cautioned that a housing turnaround remains hampered by high unemployment, the end of homebuyer tax credits and more foreclosed homes hitting the market. Many industry experts say the housing recovery could sputter in the second half of the year. This spring, however, builders have seen orders improve as affordable prices, low mortgage rates and two federal tax credits lured homebuyers into the market. Sales of new homes surged 27 percent in March, the first jump in four months and the strongest month since last July. Homebuilders Beazer Homes USA Inc. and D.R. Horton Inc. both reported an increase in net income and a bump in sales for their most-recently completed quarter. PulteGroup said completed sales jumped 77 percent from a year ago while orders rose 43 percent. The builder also almost eliminated charges related to write-downs on land and other assets to $8 million from $410 million in the prior-year quarter.
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