(Updates share price in the third paragraph.)
Oct. 27 (Bloomberg) -- PulteGroup Inc., the largest homebuilder by revenue, climbed to the highest in almost three months after reporting a narrower third-quarter loss on increased revenue and lower impairment costs.
The loss was $129.3 million, or 34 cents a share, compared with a loss of $995.1 million, or $2.63, a year earlier, the Bloomfield Hills, Michigan-based company said today in a statement. Revenue climbed to $1.14 billion from $1.06 billion.
PulteGroup has been cutting expenses as U.S. demand for new homes remains weak amid an unemployment rate above 9 percent and competition from cheaper existing houses. The shares gained 9.7 percent to $5.41 at the close in New York. It was the highest share price since Aug. 4 and the second-best performance in the 12-member Standard & Poor’s 1500 Homebuilding Index.
“If you back out the goodwill charge, they had an operating profit and they haven’t had that in quite a while,” Jack Micenko, an analyst with Susquehanna International Group LLP in New York, said in a telephone interview.
The third-quarter results included an impairment charge of about $241 million related to the decline in the company’s stock value, as well as a $73 million tax benefit. A year earlier, the company recorded $986 million in charges, mostly related to its August 2009 purchase of rival Centex Corp.
PulteGroup’s net new orders were little changed from a year earlier at 3,564 houses, the company said. Closings rose 9 percent to 4,198 homes.
“We believe we are just getting started on a road for improvement,” Chief Executive Officer Richard Dugas said today in a conference call with analysts.
Purchases of new U.S. homes beat economists’ projections in September, rising 5.7 percent to a 313,000 annual pace, data from the Commerce Department showed yesterday. Homebuilders were less pessimistic this month, according to the National Association of Home Builders/Wells Fargo sentiment index, which increased to 18, the highest level since May 2010. Readings of less than 50 mean more respondents said conditions were poor.
--Editors: Christine Maurus, Daniel Taub
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