PHM PulteGroup Inc

PulteGroup Inc. reported that its new home orders and profit rose more than analysts were expecting as the U.S. housing market continues to remain solid.

The company also said Thursday that it would add three new independent directors to its board, effective immediately, expanding Pulte's board to 13 members. The move comes as Chief Executive Richard J. Dugas Jr. and the company's founder, William J. Pulte, have been embroiled in a public battle over the company's future.

Shares, which have risen 15% so far this year, rose 2.8% to $21 in premarket trading. Pulte also announced plans to raise its share-buyback program to $1.5 billion, up $1 billion.

For the quarter that ended in June, new orders at PulteGroup grew by 11% to 5,697 homes. Analysts polled by FactSet expected new unit orders of 5,666.

In June, rival home builders KB Home and Lennar Corp. posted strong gains in new orders and backlogs. Home-building in the U.S. rebounded in June, a sign demand for housing is firm heading into the second half of the year.

"We remain optimistic about the direction of the overall housing market and expect that current economic conditions, continued job formations and low interest rates can support slow and steady growth in housing demand for the next several years," Mr. Dugas Jr. said in prepared remarks. He added that prior land investments would position the company for continued earnings growth.

Mr. Dugas said in April he would be retiring next year amid pressure from Mr. Pulte, the company's largest shareholder. But Mr. Pulte has demanded Mr. Dugas's immediate resignation, arguing in a series of letters that PulteGroup's stock performance and sales volume have lagged behind rival home builders throughout the housing recovery.

Shareholders re-elected Mr. Dugas as chairman and chief executive, along with the entire board, at the company's annual meeting in May. The company said Thursday that two of its newly named board members, John R. Peshkin and Joshua Gotbaum, will be added to its previously established CEO search committee. Scott F. Powers was the third member added to the board.

Over all, PulteGroup reported profit of $117.8 million, or 34 cents a share, compared with $103.3 million, or 28 cents a share, in the year-earlier period. Excluding certain items, the company earned 37 cents a share.

Analysts polled by Thomson Reuters had expected earnings of 32 cents a share.

Revenue grew 41% to $1.8 billion, thanks to a surge in home-sale revenue on higher average selling prices. Analysts had expected revenue of $1.66 billion.

Earlier Thursday, home builder D.R. Horton Inc. said new orders rose 13% as profit rose in-line with consensus estimates.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

July 21, 2016 08:55 ET (12:55 GMT)

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