PulteGroup (PHM) - Get PulteGroup Inc. Report shares were higher on Tuesday as the Atlanta homebuilder reported better-than-expected orders and beat Wall Street's fourth-quarter earnings expectations.
Quarterly adjusted net income was $312 million, or $1.14 a share, compared with $314 million, or $1.11, in the year-earlier quarter. Analysts surveyed by FactSet were looking for earnings of $1.08 a share.
Revenue totaled $3.02 billion, up from $2.99 billion. The latest figure beat Wall Street's call for $2.97 billion. Contracts to buy homes rose 33% to 5,691, beating analysts' forecast of 4,850.
At last check PulteGroup shares were trading at $46.69, up 5.4%.
Evercore ISI analyst Stephen Kim upgraded PulteGroup to outperform from in line with a $49 price target.
The increased orders show that "the recovery in housing demand that began earlier this year gained momentum through the fourth quarter as we realized strong sales across all buyer groups," President and CEO Ryan Marshall said in a statement.
Marshall said strong demand for new homes is driven by favorable market dynamics, including improved affordability due in part to low mortgage rates; high employment and consumer confidence, and a generally balanced inventory of new homes.
The Conference Board reported stronger-than-expected U.S. consumer confidence for January, which owed largely to optimism about the labor market.
"The sustained strength in housing demand allowed us to deliver strong fourth-quarter and full-year results and has PulteGroup well positioned to increase delivery volumes, revenues, homebuilding gross margins and earnings in 2020," Marshall said.
Separately, PulteGroup said it had acquired Innovative Construction Group, the Jacksonville, Fla., "off-site solutions provider focused on single-family and multifamily wood-framed construction." Terms weren't disclosed.
Other homebuilders were higher on Tuesday as well, including Lennar (LEN) - Get Lennar Corporation Class A Report, D.R. Horton (DHI) - Get D.R. Horton Inc. Report, KB Home (KBH) - Get KB Home Report, Toll Brothers (TOL) - Get Toll Brothers Inc. Report, and Beazer (BZH) - Get Beazer Homes USA Inc. Report.