KB Home Reports Sharp Rise in New Orders; Shares Rise (KBH)

KB Home (NYSE: KBH), the fifth-largest U.S. homebuilder, today reported its third-quarter financial results. Shares of the Los Angeles, California-based company have risen sharply after it reported a 40% increase in new orders.

KB Home shares rose to an intra-day high of $6.08 before retreating. At last check, the stock was trading 4.90% higher at $6.

KB Home President and CEO, Jeffrey Mezger said that the company achieved encouraging operational and financial results in the third quarter despite the ongoing difficult housing environment. Mezger said that the company generated year-over-year growth in both net orders and backlog in all four of its operating regions and also improved its bottom-line results by narrowing its net loss significantly from the second quarter.

For the third quarter ended August 31, 2011, KB Home reported total revenue of $367.3 million, down 27% on a year-over-year basis. The decline in revenue was mainly due to a 31% decline in the number of homes delivered in the quarter offset partially by a 6% increase in average selling price. During the third quarter, the company delivered 1,603 homes, compared with 2,320 homes delivered in the same period in the previous year.

KB Home attributed the year-over-year decline in homes delivered to the April 30, 2010 expiration of the federal homebuyer tax credit, which boosted deliveries in the third quarter of 2010.
KB Home’s homebuilding business reported operating income of $1.4 million for the third quarter ended August 31, 2011, compared with an operating income of $8.4 million reported for the same period in the previous year.

The company’s net orders in the third quarter of 2011 jumped 40% on a year-over-year basis, which is an encouraging sign. Net orders climbed in all four of the company’s geographic regions.

KB Home posted total pre-tax loss of $9.6 million for the third quarter of 2011, compared with pre-tax loss of $6.7 million reported for the same period in the previous year. The company’s net loss for the quarter was $9.6 million, or $0.13 per share, compared with a net loss of $1.4 million, or $0.02 per share reported in the same period in the previous year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.