Earnings Analysis for PHM: Detailed Review for Past Three Years
Revenue Analysis
Total and Operating Revenue: PHM has shown volatility in its total and operating revenue over the selected period. From Q3 2023 to Q1 2024, revenue fluctuated from $4.003 billion to $3.949 billion, indicating a slight downturn in the most recent quarter. Noteworthy is the peak in Q4 2023 at approximately $4.294 billion.
Gross Profit Margin: Gross profit has been relatively steady, despite fluctuations in revenue. Gross profit in Q1 2024 was $1.172 billion compared to $1.182 billion in Q3 2023, with a high of $1.250 billion in Q2 2023. The gross profit margin as a percent of total revenue has been maintained between roughly 29.9% to 31.7% during these periods.
Cost Management
Cost of Revenue: The cost of revenue has seen marginal fluctuations, moving from $2.821 billion in Q3 2023 to $2.778 billion in Q1 2024. This component remains the largest expense, reflecting the significant cost base associated with PHM’s operations.
Operating Expense: Total operating expenses, which include SG&A and other operational costs, variably increased up to $360 million in Q1 2024 from $355.79 million in Q3 2023, indicating controlled operational expenditure despite revenue shifts.
Total Expenses: The trend in total expenses closely mirrors revenue patterns, suggesting that PHM’s expenditure scales in relation to its operational size, maintaining this behavior consistently across the period analyzed.
Profitability Analysis
EBITDA: EBITDA reflects a stable profitability measure, positioned around $889.819 million in Q1 2024, slightly decreased from the $867.995 million recorded in Q3 2023. The high in Q4 2023 was about $967.999 million.
Operating Income: From Q3 2023 ($826.709 million) to Q1 2024 ($811.518 million), operating income displays a slight contraction amid stable total expenses, which may indicate slight inefficiencies or increased cost of sales not entirely offset by increased revenues.
Pretax and Net Income: Pretax income was $868.643 million in Q1 2024, with a net income of $662.976 million. This followed a peak in Q4 2023 with a pretax income of $946.818 million and a net income of $710.993 million, showcasing robust profitability periods interspersed with more modest quarters.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation expenses were relatively consistent, indicating steady capital asset depreciation reflecting ongoing investments in fixed assets — about $21.061 million in Q1 2024.
Interest Expense: Interest expenses remained minimal, suggesting effective debt management and a strategic use of leverage within their operational activities.
Taxation
Tax Rate and Provision: PHM’s effective tax rate has hovered around 24-25%. The tax provision was $205.667 million in Q1 2024, compared to $208.539 million in Q3 2023, adjusting appropriately with pretax earnings and reflecting predictable fiscal obligations.
Tax Effect of Unusual Items: There were minor unusual items affecting tax calculations, most notably a tax effect of -$960,798 in Q1 2024, which had marginal impact on the overall tax expenses.
Shareholder Metrics
Earnings Per Share (EPS): Diluted EPS was at 3.1 in Q1 2024, slightly down from 3.28 in Q4 2023. The EPS figures suggest modest earnings distribution to shareholders amid varied profit levels.
Net Income Available to Common Stockholders: Net income available to common stockholders stood at $662.976 million in Q1 2024, aligning with the net income and reflecting a consistent allocation to shareholders after accounting for non-controlling interests and preferred dividends.
Conclusion
PHM’s financial performance over the past quarters reveals a robust revenue base with controlled operational expenses and steady profitability. While there are slight fluctutations in profitability metrics like operating income and net income, the company maintains healthy cash flow indicators and shareholder returns. Continued optimization in cost management, alongside strategic growth initiatives, could enhance future earnings results and shareholder value.