PulteGroup, Inc. (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2021. For the quarter, the Company reported net income of $503 million, or $1.90 per share. Adjusted net income for the quarter was $456 million, or $1.72 per share, after excluding a $46 million pre-tax insurance benefit and a tax benefit of $12 million resulting from a change in valuation allowances associated with state net operating loss carryforwards. Prior year reported net income was $349 million, or $1.29 per share. Adjusted net income for the prior year period was $311 million, or $1.15 per share, after excluding a $61 million pre-tax insurance benefit and $10 million of pre-tax charges associated with actions taken in response to the COVID-19 pandemic.

“PulteGroup reported outstanding second quarter financial results, driven by strong top line growth in combination with a 270-basis point increase in our gross margin,” said Ryan Marshall, President and Chief Executive Officer of PulteGroup. “With a backlog exceeding 20,000 homes valued at $9.8 billion, I believe the Company is well positioned to realize further gains in the coming quarters as we work to grow our operations and continue to deliver high returns on equity, which totaled 25.7%* for the trailing 12 months.”

“We are experiencing very favorable market dynamics, led by strong housing demand and a generally limited inventory of new and existing homes,” added Marshall. “With the economy continuing to recover, a very positive job market, low interest rates and high levels of consumer confidence, we remain optimistic about demand conditions and the overall strength of the housing market going forward.”

Home sale revenues for the second quarter increased 31% over the second quarter of last year to $3.2 billion. The increase in revenues for the quarter was driven by a 22% increase in closings to 7,232 homes, along with a 7% increase in average sales price to $447,000. The increase in average sales price for the second quarter reflects the benefit of price increases the Company has realized across all buyer groups.

Homebuilding gross margin for the second quarter was 26.6%, which represents an increase of 270 basis points over the comparable prior year period and an increase of 110 basis points from the first quarter of 2021. The Company’s reported SG&A expense for the quarter of $272 million, or 8.4% of home sale revenues, included the $46 million pre-tax insurance benefit recorded in the period. Excluding this benefit, the Company’s adjusted SG&A expense for the quarter was $319 million, or 9.8% of home sale revenues. The Company’s reported SG&A expense for the second quarter of 2020 was $197 million, or 8.0% of home sale revenues, with an adjusted SG&A expense of $247 million, or 10.0% of home sale revenues.

Second quarter net new orders increased 28% over the prior year to 8,322 homes. The dollar value of net new orders was $­­­4.3 billion, which is an increase of 59% over the comparable prior year period. For the second quarter, the Company operated out of an average of 808 communities.

The Company’s unit backlog at the end of the second quarter was 20,056 homes, which represents an increase of 52%, or 6,842 homes, over the prior year backlog of 13,214 homes. The dollar value of homes in backlog was $9.8 billion, which represents an increase of 70% over last year.

Pre-tax income for the Company's financial services operations was $51 million, down from $60 million last year, as higher loan volumes were offset by a more competitive pricing environment. Mortgage capture rate for the second quarter was 86% compared with 87% last year.

Inclusive of the $12 million tax benefit realized in the period, the Company’s reported income tax expense was $136 million, representing an effective tax rate of 21.3%.

The Company ended the second quarter with $1.7 billion of cash after using available funds to repurchase 3.6 million of its common shares for $200 million, or an average price of $55.84 per share. At quarter end, the Company had a net debt-to-capital ratio of 4.5%.

A conference call discussing PulteGroup's second quarter 2021 results is scheduled for Tuesday, July 27, 2021, at 8:30 a.m. Eastern Time. Interested investors can access the live webcast via PulteGroup's corporate website at www.pultegroup.com.

* The Company's return on equity is calculated as net income for the trailing twelve months divided by average shareholders' equity, where average shareholders' equity is the sum of ending shareholders' equity balances of the trailing five quarters divided by five.