PulteGroup 3Q Loss Widens On Charges, Tops Street
LOS ANGELES (AP) â¿¿ Summer's gone, but the worst housing demand homebuilders have seen in decades is dragging into the fall.
PulteGroup Inc. said Wednesday the lackluster demand trends the homebuilder saw in the July-September quarter extended into last month, and the company is planning for challenging industry conditions to continue.
"What we saw in the third quarter was an industry where demand continued to move along the bottom as buyers elected to remain on the sidelines," said Richard Dugas, the builder's chairman, president and chief executive.The company, which posted a wider third-quarter loss because of hefty charges, said its new home orders slid 12 percent from a year ago and roughly 15 percent since the second quarter. Shares in the Bloomfield Hills, Mich., company tumbled 62 cents, or 7.7 percent, to $7.45 in afternoon trading. The builder's results highlight concerns that the housing market slide that began after federal homebuyer tax credits expired in April is far from over. Absent the government incentives â¿¿ and despite mortgage rates remaining at near-historic lows â¿¿ many would-be homebuyers are balking, put off by high unemployment, tight credit and uncertainty about home prices. The U.S. said last month that home sales rose 6.6 percent from August to September, but the May-September period still clocked in as the worst for new home sales on records dating back to 1963. In the midst of that decline in demand, several large homebuilders have reported, on average, a 30 percent annual decline in new home orders for the July-September quarter. Last week, builder Meritage Homes Corp. said orders were down 36 percent from a year ago, while Ryland Group Inc. reported orders were down 37 percent. PulteGroup said it will continue to cut direct construction and overhead costs and will lower its 2011 selling, general and administrative spending by about $100 million as it deals with softness in the housing market.
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