PulteGroup Inc. (NYSE:PHM) stock rose Thursday despite the homebuilder reporting weaker-than-expected third-quarter earnings, as declining home deliveries, softer orders and affordability concerns weighed on results.
PulteGroup reported earnings of $2.53 per share, missing analysts’ consensus estimate of $2.66.
Revenue fell nearly 10% year over year to $3.974 billion, below the $4.205 billion consensus estimate.
Home Deliveries and Orders Decline
Home deliveries fell 9% to 6,876, slightly below company guidance. Net new orders declined 6% to 6,208, while community traffic dropped 14%.
Orders from first-time and move-up buyers fell 9% and 14%, respectively. However, active adult orders increased 11%.
Elevated mortgage rates, inflation and affordability concerns continued to pressure demand. Meanwhile, fewer sales of speculative homes weighed on closings.
PulteGroup’s backlog increased to 10,298 homes valued at $6.4 billion, up from 9,888 homes worth $6.2 billion a year earlier.
The average community count rose 7% to 1,077, while speculative home inventory declined 10%.
Margins Narrow As Costs Ease
Gross margin contracted 140 basis points to 24.8%, although construction costs declined 5% to $75 per square foot.
Financial services pretax income increased to $46 million, while mortgage capture improved to 85%.
PulteGroup repurchased $350 million in shares during the quarter, bringing year-to-date shareholder returns through buybacks and dividends to $1.2 billion.
The company ended the quarter with $1.4 billion in cash and expects approximately $1 billion in full-year operating cash flow.
PulteGroup’s Fourth-Quarter Outlook
PulteGroup expects community count to increase 3% to 5% in the fourth quarter.
Management projects 7,000 to 7,500 home closings in the fourth quarter and 27,000 to 27,500 deliveries for the full year.
The company expects average selling prices of $550,000 to $560,000 and fourth-quarter gross margins of 24% to 24.5%.
Full-year gross margin guidance remains at 24.5% to 25%.
Housing Affordability Remains a Concern
During Thursday’s earnings call, CEO Ryan Marshall said surging mortgage rates, persistent inflation, global tensions and weakening consumer confidence prompted more Americans to put their home searches on hold, particularly in September.
He added that the slowdown continued into October, with first-time buyers facing the greatest pressure from higher borrowing costs.
PulteGroup expects elevated mortgage rates to continue pressuring demand, although lower borrowing costs could improve buyer confidence.
Stronger markets in Florida and parts of the Midwest helped offset weakness elsewhere.
Management plans to protect margins through disciplined pricing, tighter construction controls and production aligned with demand.
The company may also reduce land spending in 2027 and abandon optioned lots that fail to meet return targets.
Despite near-term challenges, PulteGroup remains optimistic about long-term housing demand.
PHM Price Action: PulteGroup shares were up 4.29% at $117.73 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
