Pulte Homes Inc., the fourth-largest U.S. homebuilder, reported a $696.1 million first-quarter net loss, about three times wider than analysts expected, as stricter mortgage-lending standards cut demand.
The net loss swelled to $2.75 a share, from $85.7 million, or 34 cents, a year earlier, the Bloomfield Hills, Mich.-based company said yesterday in a statement. Pulte’s sixth consecutive quarterly loss included $663.6 million of expenses to write down the value of land. Revenue declined 23 percent to $1.45 billion.
“The difficult housing environment continued to erode during the first quarter of 2008,” Richard Dugas, Pulte’s chief executive officer, said in the statement. “Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak.”
New home sales in the U.S. fell in February to the lowest in 13 years as potential buyers found it difficult to get home loans. Total mortgage originations are projected to fall 10 percent in the first quarter to $565 billion from a year earlier, according to a Mortgage Bankers Association forecast.
Pulte, the builder of Del Webb-brand homes for retirees, was projected to report a net loss of 91.5 cents a share, according to the average estimate of 10 analysts in a Bloomberg survey.
Pulte shares fell 72 cents, or 5.2 percent, to $13.10 at 4:02 p.m. in New York Stock Exchange composite trading Wednesday. They’ve dropped 53 percent over the past 12 months, compared with a 43 percent decline in a Standard & Poor’s measure of 15 homebuilders.
Pulte ended the quarter with $1.1 billion in cash and said it expects to have as much as $2.2 billion in cash at the end of 2008.
A Standard & Poor’s measure of 15 home construction companies, including Pulte, has gained 10 percent this year on expectations interest rate cuts by the Federal Reserve will make mortgages more affordable and falling home prices will boost demand.
Pulte is cutting prices on homes to reduce inventory. The average price for a Pulte home in the first quarter fell 11 percent to $295,000.
The 58-year-old company slashed staff to about 8,500 as of Dec. 31, down 31 percent from a year earlier.
New orders fell 36 percent to 5,402 homes from a year earlier. The company’s backlog, or homes under contract and not yet sold, fell 36 percent to 8,559. The value of the backlog was $2.6 billion.
Pulte, which operates in 26 U.S. states, generated the most revenue in the quarter from home sales in its Southwest region of Arizona, Nevada and New Mexico.
— Bloomberg News