Atlanta homebuilder PulteGroup, caught in a squall with its founding family over its performance in recent years, said Thursday that increased home sales helped boost its first quarter profit by 51 percent.
PulteGroup said it earned $83.3 million, or 24 cents per share, in the quarter ended March 31, beating most analysts’ forecasts. Its revenue rose 26 percent to $1.43 billion in the period, also surpassing forecasts.
But the stronger results are unlikely to quell a fight between the company’s top leadership and its founder and largest shareholder, 83-year-old Bill Pulte, as well as his grandson of the same name.
In a letter to shareholders Wednesday, Pulte called on CEO Richard Dugas, 50, and the board’s lead director, Jim Postl, to resign “immediately.” Pulte, who owns 9 percent of the company’s stock, said he also plans to vote against all of the company’s directors at the company’s annual shareholder meeting in Atlanta on May 4.
“Dugas and Postl have lost credibility with shareholders,” said Pulte in his letter. He said the company has slipped from the industry’s largest homebuilder to third place. He said its profits and stock performance have likewise trailed its rivals.
PulteGroup shares fell slightly Thursday in a broadly down market, despite the higher first-quarter results. Shares fell less than 0.3 percent, to $19.13. Its shares are down about 13 percent in the last 12 months.
The two sides have been locked in an unusually public fight for the last three weeks over how the company is doing, and who should run it.
Three weeks ago, the company abruptly announced Dugas’ plan to retire next year, partly because of Pulte’s unhappiness. The founder’s gripes include the company’s Dugas-led headquarters move in 2014 to Atlanta from suburban Detroit.
Last week, Jim Grosfeld, a Pulte ally, resigned from the board of directors, saying he had been excluded from a number of board meetings.
Thursday, the company said closed sales of homes increased 17 percent, to 3,945 homes. The average selling price rose 9 percent to $353,000.
The market still has yet to fully rebound from the housing crisis of nearly a decade ago. New-home sales remain well below the historic 52-year average of 655,200. In its report for February, the Commerce Department said that new-home sales rose 2 percent to a seasonally adjusted annual rate of 512,000. All of the increase came from a 38.5 percent surge in purchases in the West.
Meanwhile, a limited supply of houses have pushed up prices and curbed sales.
PulteGroup’s backlog at the end of the first quarter totaled 8,755 homes valued at $3.4 billion, compared with prior year backlog of 7,624 homes valued at $2.6 billion.
The Associate Press contributed to this report.
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