Home builder KB Home (KBH) Thursday reported a sharply narrower first-quarter loss, as revenues increased 59 percent from last year, with growth across all regions.
Jeffrey Mezger, CEO, said, "Our revenues grew by 59% from a year ago, driven by both higher deliveries and increased pricing power in our served markets, reflecting the success of our land repositioning initiatives and a shift in consumer demand to larger homes.''
Net loss for the quarter narrowed to $12.46 million or $0.16 per share from $45.80 million or $0.59 per share in the prior year. On average, 21 analysts polled by Thomson Reuters expected a loss of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.
The housing gross profit margin improved to 14.8 percent from 8.0 percent last year. There were no inventory impairment charges in the just concluded quarter, compared to $6.6 million of such charges last year.
Revenues increased to $405.22 million from $254.56 million, as a result of an increase in the number of homes delivered and a higher average selling price. Analysts expected revenues of $359.80 million.
The company delivered 1,485 homes during the quarter, up 29 percent from last year, reflecting increases in three of its four homebuilding regions.
The overall average selling price climbed 24 percent to $271,300, marking the 11th consecutive quarter of year-over-year improvement, and the highest first-quarter average selling price since 2006.
The home builder attributed the higher average selling price to ongoing strategy of repositioning the company's operations to serve its core first-time and first move-up homebuyers in higher-performing choice locations. Greater demand for larger homes and more design options as well as generally rising home prices also contributed to the increase.
Net orders rose 40 percent to 1,671 and the overall value of net orders surged 83 percent to $506.8 million. Potential future housing revenues in backlog at February 28, 2013 increased 53 percent to $703.9 million.
Looking ahead, Mezger said, ''Based on the strategic steps we have taken, our improved performance over the past year and the accelerating momentum we are seeing in our business, we are confident that we will achieve our profitability goal for 2013."
KBH, which closed at $21.57 on Wednesday, is adding 2.8 percent in pre-market activity.
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