NEW YORK (AP) — Homebuilder PulteGroup said its net income dropped 14 percent after the company booked a combined $66 million in charges for settling a legal dispute, buying back debt and its corporate relocation.
The company reported net income of $36.4 million, or 9 cents per share, in the three months through June. That's down from a profit of $42.4 million, or 11 cents per share, in the same period the year before. Without the charges earnings would have risen to 26 cents a share.
The results fell short of the predictions of Wall Street analysts. They had forecast that PulteGroup Inc. would report earnings of 29 cents per share, according to the data provider FactSet.
Pulte's share's slumped $1.16 or 6.3 percent, to $17.29 in pre-market trading.
The homebuilder took a charge of $30 million from a legal dispute at a previously completed luxury community, as well as a charge of $23 million associated with the repurchase of its own outstanding debt.
PulteGroup also took $13 million in charges tied to the corporate relocation that it announced two months ago. The company said in May that it planned to move its headquarters to Atlanta from the suburbs of Detroit next year. The relocation will put it closer to its customers and a bigger portion of its investment portfolio.
Despite the charges, PulteGroup's underlying business is still growing.
Home sale revenues for the second quarter rose 19 percent to $1.22 billion. Pulte sold more homes at higher prices. The average selling price increased to $294,000 from $268,000 a year ago. Backlog was up 13 percent, to 8,558 homes. Backlog value rose 25 percent, to $2.71 billion.
In comments accompanying the earnings report, Chairman and CEO Richard Dugas said that the housing recovery remained intact and even the recent rise in interest rates had, so far, had little impact on business activity.
"Consumers are continuing to exhibit a sense of urgency in their desire to purchase a new home," said Dugas.
PulteGroup also announced a quarterly cash dividend of 5 cents a share on the company's common shares that is payable August 12, 2013 and said that the company would extend its share buyback program by $250 million to $352 million.