OREANDA-NEWS. PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2015.  For the quarter, PulteGroup reported net income of $228 million, or $0.64 per share, inclusive of $0.07 per share of benefit associated with the reversal of certain mortgage and construction related insurance reserves.  Prior year net income of $217 million, or $0.58 per share, included $0.16 per share of income tax and insurance benefits.

"PulteGroup's fourth quarter results reflect improved performance from our homebuilding operations and, more broadly, the favorable demand environment we continue to experience within the housing industry," said Richard J. Dugas, Jr., Chairman, President and CEO of PulteGroup.  "We realized a significant increase in fourth quarter operating performance driven by gains in order rates, closings, pricing and margins, while the 26% increase in our backlog value to $2.5 billion provides excellent momentum for strong earnings growth in 2016.

"While heightened global economic concerns have created greater market volatility, the positive trends in jobs, demographics and household formations, along with low interest rates and limited housing inventory, support expectations that housing demand continues to move higher at a measured pace for a number of years.  Given the investments we are making into our business, including our recently completed John Wieland asset purchase, PulteGroup is well positioned to grow its revenues and earnings, while continuing to generate high returns on invested capital and consistently return funds to shareholders."

Fourth Quarter Results

Home sale revenues for the fourth quarter totaled $2.0 billion, an increase of 12% over the prior year.  The increase in revenues was driven by a 7% increase in closings to 5,662 homes combined with a 6% increase in average selling price to $353,000.  The higher average selling price in the quarter reflects an ongoing shift in the mix of homes closed toward the Company's Pulte Homes brand, as well as price increases realized across all three of the Company's national brands: Centex, Pulte Homes and Del Webb.

Home sale gross margin for the period was 23.5%, an increase of 40 basis points from the prior year.  SG&A expense for the quarter of $139 million, or 7.0% of home sale revenues, includes the benefit of a $30 million reversal of construction related insurance reserves recorded in the period.  SG&A for the prior year period of $146 million, or 8.2% of home sale revenues, included the benefit of a $15 million reversal of construction related insurance reserves.

For the quarter, the Company reported 3,659 net new orders, an increase of 13% from prior year orders of 3,232 homes.  The dollar value of fourth quarter orders increased 24% over the prior year to $1.4 billion.  The Company ended the year with 620 active communities, which is up 4% from the comparable prior year period.

PulteGroup's backlog of 6,731 homes, valued at $2.5 billion, is its highest year-end backlog since 2007, and is up from prior year backlog of 5,850 homes, valued at $1.9 billion.  Reflecting the continued mix shift toward the Company's higher priced Pulte Homes brand, average selling price in backlog increased 10% over the prior year to $365,000.

The Company's financial services operations reported pretax income of $29 million benefitted from the reversal of $12 million in mortgage repurchase reserves in the quarter.   Prior year pretax income for financial services totaled $13 million.  Mortgage capture rate for the fourth quarter was 83% compared with 81% in the prior year.

The Company ended the year with a cash balance of $775 million and a debt-to-capitalization ratio of 30%.  Given trading limitations resulting from work to close its previously disclosed term loan and to acquire certain assets of John Wieland Homes and Neighborhoods, the Company did not repurchase any shares of common stock during the quarter.