No. 1 U.S. homebuilder PulteGroup Inc posted a far narrower-than-expected quarterly loss on Wednesday due to lower land charges and said it expects to record a profit for 2010 overall.
Pulte reported a first-quarter loss of $12.5 million, or 3 cents a share, versus a year-earlier loss of $514 million, or $2.02 per share.
Analysts, on average, had expected a loss of 22 cents per share.
Total charges were $8 million versus our $100 million forecast, adding 15 cents per share, UBS analyst David Goldberg wrote in a note to clients.
Last year, land charges alone were $410 million. The decrease in charges related to land reflects an improving economy and stabilizing home prices.
We believe the worst of the impairment process is behind us, Chief Executive Richard Dugas said during a conference call with analysts.
Revenue rose 75 percent to $1.0 billion, and orders rose 43 percent to 4,320 homes.
The orders number could have been even higher, according to Goldberg, but Pulte made a strategic choice to limit its number of quick-delivery homes, which constrained its ability to capture buyers rushing to take advantage of the federal homebuyer tax credit before it expired on April 30.
That decision will negatively impact near-term results, Goldberg said.
Pulte expects market conditions to remain relatively stable for the rest of the year, the company, based in Bloomfield Hills, Michigan, said in a statement.
Pulte, which operates in 29 states, gained its market-leading position by acquiring Centex last year.
Several of its rivals, including D.R. Horton Inc and Meritage Homes Corp, made money in recent quarters, helped by the homebuyer tax credit, tax benefits and recovery in the broader economy.
Most analysts forecast a lull in homebuying demand in the near-term, however, because while the tax credit induced consumers to expedite their purchases, it did not create new homebuyers.
In premarket trading, Pulte shares were unchanged from their Tuesday close, at $13.10.
(Reporting by Helen Chernikoff and Bijoy Koyitty; editing by John Wallace)