PulteGroup's Q3 Earnings & Revenues Beat, Net New Orders Down Y/Y

PulteGroup Inc. PHM has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.

The performance of the company was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues.

The company remains optimistic about the lowered interest rates; however, the improvements in buyers' demand are still far from normalizing, given the market uncertainties. With a diversified business platform, PHM aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.

Shares of this Georgia-based homebuilding and financial services company tumbled 6% during Tuesday's pre-market trading hours, following the earnings release.

Inside PulteGroup’s Q3 Headlines

PulteGroup reported adjusted earnings of $2.96 per share, which topped the Zacks Consensus Estimate of $2.86 by 3.5%. In the year-ago quarter, the company reported adjusted earnings per share of $3.35.

PulteGroup, Inc. Price, Consensus and EPS Surprise

PulteGroup, Inc. price-consensus-eps-surprise-chart | PulteGroup, Inc. Quote

Total revenues (Homebuilding & Financial Services) of $4.4 billion also surpassed the consensus mark of $4.3 billion by 2.3% but declined 1.6% from the year-ago figure of $4.48 billion.

Segmental Discussion of PulteGroup

PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.

Homebuilding: Revenues from this segment were down 1.4% year over year to $4.3 billion. We had expected Homebuilding revenues to decrease 4.7% year over year to $4.16 billion.

Home sale revenues decreased 2.2% year over year to $4.25 billion. Land sale and other revenues increased 175.7% to $53.2 million from a year ago.

The number of homes closed dropped 5% to 7,529 units (versus our projection of 7,336 units) from the year-ago level. The ASP of homes delivered was $564,000, up 2.9% year over year. We predicted the ASP of home deliveries to be $561,500.

Net new home orders declined 5.6% year over year to 6,638 units (versus our expectation of 7,309 units). Also, the value of net new orders declined 7.4% from a year ago to $3.64 billion.

At the end of the third quarter, PulteGroup’s backlog, which represents orders yet to be closed, was 9,888 units, down 18.2% from a year ago. In addition, potential housing revenues from the backlog were down 19% year over year to $6.23 billion from $7.69 billion.

Home sales gross margin was down 260 basis points (bps) year over year to 26.2%. SG&A expenses (as a percentage of home sales revenues) remained flat at 9.4% year over year.

Financial Services: Revenues from this segment dropped 9.3% year over year to $103.3 million. Pretax income for the segment declined to $44 million from $55 million a year ago, due to lower closing volumes in the company’s homebuilding operations, alongside a downtrend in the mortgage capture rate to 84% from 87% last year.

Sneak Peek at PulteGroup’s Financials

At the end of the third quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.48 billion, down from $1.65 billion at the end of 2024. Net debt-to-capital was 1.1% at the third-quarter end against (0.3)% at 2024-end.

As of the first nine months of 2025, net cash provided by operating activities was $1.1 billion, down from $1.11 billion in the prior-year period.

In the first nine months of 2025, the company repurchased 8.2 million common shares for $900 million at an average price of $109.81 per share.

PHM’s Zacks Rank & Peer Releases

PulteGroup currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KB Home KBH reported third-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.

KB Home’s quarterly results highlighted ongoing challenges in a difficult housing market, reflecting pricing pressures across key regions. In response to weaker demand and the shortfall in orders, management adopted a cautious stance and revised its fiscal 2025 housing revenue guidance downward. KB Home is focused on expanding its build-to-order mix, reducing build times and enhancing customer satisfaction through affordable prices and personalization while maintaining strict cost controls.

Lennar Corporation LEN reported dismal results for the third quarter of fiscal 2025, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate. Also, both metrics tumbled on a year-over-year basis.

The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering the ASP adversely impacted revenue growth during the quarter. Nonetheless, Lennar is focusing on scale and technology investments to drive cost efficiencies. A strong balance sheet and disciplined execution are expected to support margin improvement as conditions stabilize.

A Stock to Consider

Here is a stock from the Zacks Construction sector, which according to our model, has the right combination of elements to post an earnings beat.

United Rentals, Inc. URI currently has an Earnings ESP of +10.34% and a Zacks Rank #2 (Buy) at present.

United Rentals’ earnings for the third quarter are expected to increase 4.13%. The company reported better-than-expected earnings in one of the trailing four quarters and missed on the remaining three occasions, the average negative surprise being 1.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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