Pulte Homes posts $361.4M loss for Q3

[November 04, 2009]  BERLIN (AP) -- Pulte Homes Inc. lost $361.4 million in the third quarter, but with the acquisition of Centex Corp., the homebuilder increased sales by more than a third.

Pulte completed its purchase of Centex in August, making the combined company the nation's largest builder. The deal gave Pulte a stronger foothold in the first-time homebuyer market, which has seen a big boost in sales because of a temporary federal tax credit.

The company's most recent results "reflect a homebuilding industry that continues its transition toward more stable market conditions as lower prices and historically low mortgage rates are helping to support homebuyer demand," Richard Dugas, Pulte's president, chairman and CEO, said in a statement.

Headwinds remain, however, including a weak economy, more foreclosures and rising unemployment. The first-time homebuyer tax credit of up to $8,000 is also set to expire at the end of this month, though Congress is considering extending it through March and gradually phasing it out over the rest of next year.

One proposed bill in the Senate would give homebuyers until the end of April to sign contracts and still qualify. The bill would also give a $6,500 tax credit for buyers who have owned their home for at least five of the past eight years.

A more generous tax credit would likely give homebuilders a boost, but there's concern that the current incentive has already tapped demand builders would have seen over the next few months.

"I question, especially if mortgage rates start going up, what's going to be the real impact on housing sales," said Fox-Pitt Kelton analyst Robert Stevenson.

Pulte lost $1.15 a share in the three months ended in September. The company offered no combined figures for the third quarter last year, when Pulte lost $280.4 million, or $1.11 a share.

Earnings were hurt by $86.7 million in costs related to the Centex acquisition.

Revenue dropped to $1.1 billion from $1.6 billion the year before as the company's average home price fell by 10 percent to $253,000.

Analysts polled by Thomson Reuters were expecting a loss of 64 cents a share on revenue of about $1.2 billion.

New home orders, including Centex's operations, climbed 35 percent to 4,048 homes versus 3,008 a year ago.

During the quarter, Pulte created the position of chief marketing officer to develop a unified strategy for its stable of brands it now has, including Del Webb, DiVosta and Fox & Jacobs.

Pulte also took steps to pay down some $1.5 billion in debt in connection to the Centex acquisition. The builder doesn't have any major debt repayments before 2013, and expects to end the year with $2 billion in cash.

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On the Net:

Pulte Homes: http://www.pulte.com/

[Associated Press; By J.W. ELPHINSTONE]

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