KB Home (NYSE: KBH)
KB Home revealed higher-than-expected fiscal third quarter earnings, sending its shares up 5.2% premarket on Wednesday. The stock later shed off the gain by 3.95% to trade at $24.29 in the early hours of regular trading.
Sales increased by 7% during the quarter, but slightly missed the expectations of analysts. The healthy US economy helped push deliveries up by 8% from the year-ago period. KBH stock has risen 17% since the beginning of the year.
The company posted net income of $87.5 million, or $0.87 per share during the period, up from $50.2 million, or $0.51 per share in the third quarter of fiscal 2017. Sales were $1.2 billion, up rose 7% from $1.1 billion reported in the year-ago period.
Thompson Reuters, based on analyst estimates, was expecting the company to report adjusted earnings of $0.77 cents a share on sales of $1.3 billion.
KB Home CEO Comments
“We produced solid third quarter results, generating a 71% increase in our diluted earnings per share. Our core homebuilding business continued to perform very well, as healthy demand in our served markets and effective execution on our distinctive customer-centric operating model drove revenue expansion, a 190-basis point improvement in operating margin, and a meaningful increase in net income,” commented Jeffrey Mezger, Chief Executive Officer of KB Home.
“Our strong earnings growth coupled with the substantial cash flows we have generated provides us with considerable flexibility to increase the scale of our business. During the quarter, we significantly expanded our existing Jacksonville, Florida operations by acquiring approximately 2,100 owned and controlled lots from a regional homebuilder. We also expanded our West Coast presence by entering the attractive Seattle, Washington market. The continued successful execution of our three-year Returns-Focused Growth Plan, which is centered around enhancing asset efficiency, reducing leverage and improving returns, enabled us to make these and other substantial investments in land and land development as well as pay off $300 million of debt, all using internally generated cash. We are pleased to report that we remain on track to achieve many of the 2019 financial targets under our plan a year earlier than projected,” concluded Mezger.
KB Home Company Profile
KB Home operates as a homebuilding company in the United States. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, and active adult homebuyers.
The company also provides property and casualty insurance, as well as earthquake, flood, and personal property insurance to its homebuyers; title services; and mortgage banking services, including residential mortgage loan originations to its homebuyers. It has operations in California, Arizona, Nevada, Colorado, Texas, Florida, and North Carolina.
The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California. – Yahoo Finance