Bloomfield Hills, MI, October 5--Pulte Homes Inc. on Monday warned third-quarter earnings from continuing operations would fall short of its earlier forecast, saying it had been forced to roll back some price increases in the booming Las Vegas housing market.
The company’s shares fell almost 7 percent in after-hours trading. During the regular trading session, shares of Pulte and other home builders had declined on worries the Las Vegas real estate market is slowing enough that builders may have to lower their prices.
Pulte said after exchanges closed that it saw third-quarter earnings from continuing operations of between $1.95 and $2.05 per share, down from its previous forecast of between $2.00 and $2.10 per share.
Analysts had been expecting Pulte, one of the largest U.S. home builders, to report third-quarter earnings before one-time items of almost $2.12 a share, according to Reuters Estimates.
Pulte said home buyers had balked at home price increases in the Las Vegas market, which in some cases were well above the region's average price gain of 50 percent.
"Consumer acceptance of these increases at certain price levels has apparently reached a ceiling, suggesting that prices have become higher than what the market will support," Pulte chief executive Richard Dugas Jr. said. "Pulte has already implemented actions to lower local market pricing."
The company also forecast earnings from continuing operations for the full year in the range of $7.40 to $7.70 a share, down from its previous estimate of $7.80 to $8.00. Analysts were expecting Pulte to earn $7.81 before one-time items, according to Reuters Estimates.
