PulteGroup, Inc. (NYSE:PHM) Q1 2019 Earnings Conference Call Transcript

Apr 23, 2019 • 08:30 am ET


PulteGroup, Inc. (NYSE:PHM) Q1 2019 Earnings Conference Call Transcript


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Good morning. My name is Jack and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2019 PulteGroup, Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. Jim Zeumer, you may begin your conference.

James P. Zeumer

Great. Thank you, Jack. We appreciate everyone joining this morning's call to discuss PulteGroup's first quarter financial results for the period ended March 31, 2019. Joining me for the call today are Ryan Marshall, President and CEO; Bob O'Shaughnessy, Executive Vice President and CFO; and Jim Ossowski, Senior Vice President, Finance. A copy of this morning's earnings release and the presentation slides that accompany today's call have been posted to our corporate website at pultegroup.com. We'll also post an audio replay of today's call a little later on today.

Before we begin the discussion, I want to alert all participants that today's presentation includes forward-looking statements about PulteGroup's future performance. Actual results could differ materially from those suggested by comments made today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation slides. These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports.

Now let me turn the call over to Ryan Marshall. Ryan?

Ryan R. Marshall

Thanks, Jim, and good morning. It has been discussed extensively that market conditions in the back half of '18 and particularly in the fourth quarter, were challenging across the housing industry. We believe that affordability issues, driven in part by sustained housing price increases over the last few years, along with increasing mortgage rates last year, caused homebuyers to become more cautious as 2018 progressed. The consensus was that buyer interest, as measured by traffic to communities, remained high, but the conversion of that traffic to signed purchase contracts slowed. Given these conditions, exiting 2018, there's been a lot of interest in how homebuyers have been behaving in this spring selling season of 2019.

Before parsing a variety of data points at a high level, here's what I'd tell you about the start of 2019, inclusive of the first few weeks in April. We are experiencing a very typical seasonal upswing, and are generally encouraged by the level of buyer activity that we're seeing. Further, with the strong economic backdrop and the recent decline in mortgage rates, there's every reason to believe that 2019 can be another good year for the housing industry. Overall, our first quarter results are consistent with an improving demand environment. Reflective of the typical spring selling season, traffic increased on a sequential basis throughout the quarter, with more consumers visiting our communities each month as the quarter progressed. More importantly, traffic into our communities was also up each month over the same month last year, both in absolute numbers and on a per community basis,