KB Home 4Q results beat Wall Street expectations
LOS ANGELES (AP) — KB Home's fourth-quarter net income dropped 45 percent compared with the same quarter last year when the builder logged some hefty gains, but it easily beat Wall Street expectations as revenue soared along with its backlog.
Potential future housing revenues in backlog climbed 35 percent to $618.6 million. That signifies the best fourth quarter since 2007, when the housing crisis was beginning to unfold.
Net orders rose 4 percent to 1,557.
Homes delivered climbed 6 percent to 2,122 homes and the average selling price jumped 14 percent to $270,700.
President and CEO Jeffrey Mezger said the company saw increased demand for bigger homes with more design options, which pushed average selling prices higher.
"We anticipate housing demand will continue to strengthen, particularly as more households facing rising rental costs consider the benefits of homeownership and emerge from the sidelines," Mezger said.
The entire housing sector appears to be gaining traction, thanks in part to low interest rates and a thinning of available homes that had been driving prices down sharply for years.
On Thursday, the economists expect the National Association of Realtors to report that sales of previously occupied U.S. homes likely rose last month to their highest level in more than 2½ years,
On Monday a new survey released by the National Association for Business Economics showed that top business economists believe that modest growth will be ongoing in 2013, led by rising demand for housing.
For the period ended Nov. 30, KB Home earned $7.7 million, or 10 cents per share. That compares with earnings of $13.9 million, or 18 cents per share, a year earlier. That year-ago figure included $26.4 million from a financial services gain and the company booked additional gains on a loan guaranty.
The 10 cents-per-share profit breezed past Wall Street expectations of 6 cents per share, according to a poll of analysts by FactSet.
It was the same story with revenue, which rose 21 percent to $578.2 million. Analysts that follow the company were predicting revenue of $562.9 million forecast.
KB Home's full-year loss narrowed to $59 million, or 76 cents per share. In the prior year the Los Angeles company lost $178.8 million, or $2.32 per share.
Annual revenue increased 18 percent to $1.56 billion from $1.32 billion.