PHM - PulteGroup Q3 earnings drop as net orders fall cancellations increase

PulteGroup ( NYSE: PHM ) Q3 earnings declined as demand for its homes softened with climbing mortgage rates. Net orders during the quarter fell and its cancellation rate jumped to 24% from 15% in the prior quarter.

Due to the Federal Reserve's aggressive rate hikes, the homebuilder is reassessing pending transactions. As a result of the ongoing review, Pulte ( PHM ) terminated a number of pending land transactions and wrote off $24M of deposits and related expenses.

Q3 EPS of $2.69, trailing the $2.75 consensus estimate, fell from $2.73 in Q2 and increased from $1.82 in the year-ago quarter.

Revenue of $3.94B, missing the average analyst estimate of $4.16B, rose from $3.92B in the prior quarter and from $3.48B in the year-ago period.

Home sales revenue of $3.84B increased from $3.81B in the prior quarter from $3.32B in the year-ago quarter.

Q3 net new orders fell to $2.8B rom $3.9B in Q2 and $3.8B in Q3 2021.

Unit backlog of 17,053 homes with a value of $10.6B compares with a Q2's backlog of 19,176 homes with a value of $11.6B.

Selling, general, and administrative expenses of $350.1M during Q3 edged down from $351.3M in Q2 and increased from $320.5M in the year-ago quarter.

Earlier, PulteGroup ( PHM ) GAAP EPS of $2.69 misses by $0.06, revenue of $3.94B misses by $210M

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