PulteGroup (NYSE:PHM) kicked off 2025 with earnings that outpaced Wall Street forecasts, giving its stock a 7% boost intra-day today despite a cooling housing market weighed down by affordability concerns.
In the first quarter, the homebuilder posted earnings per share of $2.57, edging past the $2.47 average estimate. Revenue also topped expectations at $3.89 billion, a slight improvement from projections, though still reflecting a 2% dip from the same period last year.
The decline in revenue stemmed largely from a year-over-year drop in home sale income, slipping from $3.7 billion as the company felt the pressure of broader economic strain and shrinking consumer purchasing power. Net income slid to $523 million, down from $663 million a year earlier, as the current quarter lacked the one-time financial boosts that lifted results in early 2024. Those previous gains included earnings from a joint venture sale and a sizable insurance payout.
Margins also narrowed slightly, with the home sale gross margin settling at 27.5%, reflecting a 210-basis-point decline year-over-year. While still solid, the dip illustrates rising cost pressures and less pricing power in today’s housing environment.
Order activity softened as well. Net new home orders dropped to 7,765 units valued at $4.5 billion, compared to 8,379 units worth $4.7 billion in the prior year. The company pointed to consumer hesitation amid higher costs and economic uncertainty as key reasons for the pullback in demand.
