KB Home (KBH: Quote) on Friday reported a loss for the second quarter that narrowed from last year, reflecting higher home deliveries and selling prices. Company-wide net orders rose 3 percent from last year.
The home builder's loss per share was narrower than analysts' estimates, while revenues beat their expectations. The company's shares are up more than 6 percent in the pre-market.
The Los Angeles, California-based company's home deliveries in the quarter rose 2 percent from the year-ago period to 1,290. Three of the company's four regions recorded higher deliveries.
The average selling price rose 9 percent from last year to $233,000, reflecting notable increases in the company's West Coast and Southwest regions. These were partly offset by decreases in the Central and Southeast regions.
Meanwhile, housing gross profit margin increased to 16.9 percent from 7.3 percent in the same period last year.
Company-wide net orders rose 3 percent to 2,049 homes, reflecting increases in the company's West Coast and Central regions. These increases were partly offset by decreases in the Southwest and Southeast regions.
Jeffrey Mezger, president and CEO of KB Home, said, "Our second quarter results reflect the continued repositioning of our operations and investments to stronger, highly desirable, land-constrained submarkets that support sales of larger, higher-priced homes to our core first-time and first move-up customers."
KB Home's second-quarter net loss was $24.14 million or $0.31 per share, narrower than loss of $68.50 million or $0.89 per share in the prior-year quarter.
The latest quarter's results included an income tax benefit of $4.50 million, primarily resulting from a state income tax refund. The company recorded an income tax benefit of $0.30 million in the year-ago period.
On average, 21 analysts polled by Thomson Reuters expected the company to report loss of $0.34 per share. Analysts' estimate typically excludes one-time items.
Total revenues for the quarter grew 11 percent to $302.85 million from $271.74 million in the year-ago period and beat analysts' consensus estimate of $301.30 million.
The increase in revenues reflect higher home deliveries and an increase in the average selling price. Home building revenues also grew 11 percent to $300.61 million.
Backlog as at May 31 totaled 2,962 homes, up 22 percent from the same period last year. This represents potential future housing revenues of about $693.41 million.
Looking ahead, Mezger said, "Entering the second half of 2012, we have a strong backlog of homes with higher selling prices and better margins to help restore profitability, and we anticipate achieving further gains in our margin performance as our revenue growth and cost-management efforts take hold."
The company said that the operational transition to Nationstar Mortgage LLC (NSM) as its preferred mortgage lender was progressing as planned. Nationstar began accepting new loan applications from the company's homebuyers on May 1, 2012.
KB Home expects its alliance with Nationstar will result in improved mortgage origination execution for its homebuyers and a more predictable business flow as the transition gains momentum.
KBH closed Thursday's trading at $8.70. In Friday's pre-market, the stock is up $0.54 or 6.21 percent to $9.24.
| || |
| To receive FREE breaking news email alerts for KB Home and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com