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PulteGroup reports YOY increase in Q2 net income, appoints 3 directors

PulteGroupInc. reported second-quarter net income of $117.8 million, or 34cents per share, for the quarter ended June 30.

The S&P Capital IQ consensus EPS estimate for the secondquarter was 32 cents.

The company said in its earnings release that the net incomeincludes pretax charges of $15 million, or 3 cents per share, incurred fromcancellations of certain pending land transactions as well as costs associatedwith the company's relocation of its corporate office.

Home sales revenue for the quarter came in at approximately$1.75 billion, jumping 41% from the year-agofigure of approximately $1.24 billion. The company said the higher revenue wasdriven by a 27% increase in deliveries, which amounted to 4,772 homes duringthe quarter, along with an 11% increase in average selling price to $367,000.

Net new orders during the quarter were up 11% year over yearon a unit basis to 5,697 homes, and the dollar value of net new orders was up21% to $2.14 billion. The company was active in 700 communities during thequarter, reflecting an 11% increase from the year-ago period.

Backlog value increased 21% to reach $3.75 billion, fromapproximately $3.09 billion in the second quarter of 2015. Backlogged unitstotaled 9,679, up 8% from 8,998 in the year-ago period.

The declared cash dividend for the quarter was 9 cents pershare, up from 8 cents in the year-ago period.

Further, the company's board approved a $1 billion increasein its existing share repurchase authorization, bringing the totalauthorization to $1.5 billion.

The company repurchased 2.6 million common shares for $48million during the quarter and had $507 million available under the existingrepurchase authorization.

PulteGroup CEO Richard Dugas outlined plans for the nextphase of the company's value creation strategy. Going forward, the companyplans to slow the growth rate in its land spending and use cash flows fromoperations to help fund the repurchase of $1.5 billion of its shares. The groupplans $250 million worth of share repurchases in the next two quarters offiscal 2016 and $1 billion repurchases in fiscal 2017, Dugas said.

Additionally, the company appointed John Peshkin, JoshuaGotbaum and Scott Powers as independent directors, effective immediately. Theboard is now comprised of 13 directors, 12 of whom are independent. Peshkin andGotbaum will join the company's CEO searchcommittee.