Higher profits than expected fail to lift investor sentiment
PulteGroup Inc. (NYSE:PHM) reported second-quarter 2026 results that exceeded Wall Street’s earnings and revenue forecasts, but weaker profitability and softer year-over-year performance weighed on investor sentiment.
The homebuilder posted adjusted earnings per share of $2.48, surpassing analysts’ consensus estimate of $2.38 by $0.10. Revenue totaled $3.98 billion, also edging above expectations of $3.94 billion.
Despite the stronger-than-expected results, PulteGroup shares fell 3.29% in premarket trading following the announcement.
Home sales and margins soften from last year
Revenue generated from home sales declined 11% year over year to $3.8 billion.
The decrease reflected an 8% drop in home closings to 6,997 units, while the average selling price slipped 3% to $544,000.
Profitability also came under pressure, with home sale gross margin narrowing to 25.0%, compared with 27.0% in the same quarter last year. However, the figure improved by 60 basis points from the first quarter, indicating some sequential recovery.
Net income fell to $472 million, or $2.48 per diluted share, from $608 million, or $3.03 per share, a year earlier.
Order growth points to resilient demand
President and Chief Executive Officer Ryan Marshall said the company’s diversified operating model continued to support performance despite a more challenging housing market.
“We continue to capture benefits from our return-focused operating model and business platform that is well diversified across markets and buyer groups.”
“The resulting benefits helped PulteGroup generate earnings of $2.48 per share in the quarter, while realizing a 6% increase in net new orders and generating a sequential increase in gross margin of 60 basis points.”
Net new orders increased 6% year over year to 7,536 homes, while the value of those orders rose 5% to $4.1 billion.
The average community count reached 1,074 during the quarter, an 8% increase from the prior year.
Strong balance sheet supports shareholder returns
PulteGroup ended the quarter with a backlog of 10,966 homes, representing a 2% increase from a year earlier and carrying a total value of $6.8 billion.
The company also continued returning capital to shareholders, repurchasing 3.1 million shares for $373 million at an average price of $119.42 per share.
At quarter-end, PulteGroup held $1.4 billion in cash and maintained a debt-to-capital ratio of 12.3%, underscoring the strength of its balance sheet.
PulteGroup stock price
