KB Home Profit Jumps, Beating Estimates

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KB Home on Thursday said its third-quarter profit nearly doubled, beating analysts’ estimates, and the L.A.-based homebuilder raised its full-year earnings forecast.


The company reported net income of $227.5 million ($2.55 per diluted share) for the third quarter ended Aug. 31, compared with $117.9 million ($1.42) a year earlier. Revenue rose 44 percent to $2.53 billion from $1.75 billion in the comparable period of the prior year.


Analysts had expected earnings of $2.39 per share on revenue of $2.48 billion.


The company said revenue growth was driven by a 45 percent increase in housing revenues during the quarter to $2.49 billion, up from $1.72 billion a year prior, resulting from double-digit growth in unit volume and average selling price. Strong revenue growth combined with an improved operating margin drove the increase in earnings.


Housing revenues in the quarter rose 45 percent to $2.49 billion, up from $1.72 billion in the year-earlier period, as unit deliveries grew 22 percent to 9,812 from 8,041 in 2004, with each of KB Home’s five geographic regions generating year-over-year growth in unit delivery volume. The overall average selling price jumped 19 percent to $254,100 from $214,400 a year earlier.


The dollar value of its backlog increased 47 percent to $7.1 billion on 27,744 units, up from $4.8 billion on 21,928 units the year before.


KB Home said it now expects full-year earnings to be $9.30 per diluted share, up from previous guidance of $9. Analysts anticipated earnings of $9.13 per share.


Shares of KB Home rose 4.2 percent to settle at $73.70 on Thursday.

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