Publication Date:
Thu, 2010-09-16 10:16
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Standard & Poor's Ratings Services on Sept. 14 lowered its ratings for home builder Pulte Group Inc., saying the company's earnings will likely remain weak into next year due to a slower-than-expected U.S. housing recovery. The home builder posted its first quarterly profit in nearly four years for the quarterended in June.
Pulte Group, based in Bloomfield Hills, Mich., posted a profit of $76.3 million in the second quarter ended June 30. Revenue rose 92 percent to $1.31 billion. The company is expected to report third-quarter results in early November. Its results were helped by the company's acquisition of Centex Corp., which closed in August 2009 and made the company the largest U.S. home builder based on the number of homes sold.
S&P also revised its outlook on the home builder to "Stable" from "Negative," concluding that Pulte Group's net losses will continue to narrow. U.S. home sales have slowed sharply since federal homebuyer tax credits expired in April. In July, sales of newly built homes tumbled to the slowest pace on records dating back to 1963. Sales rose in June, but it was the second-weakest month on record. A sluggish economic recovery, nearly 10 percent unemployment and slow job growth continue to keep many people from buying homes.
