Stock Market Watch

KB Home – KBH – Pleased to report a profit for the third quarter

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KB Home (NYSE: KBH), one of the nation’s largest and most recognized homebuilders, reported results for its third quarter ended August 31, 2012. Highlights and developments include the following:

  • Revenues Increase 16%; Earnings Per Share of $.04
  • Net Order Value Increases 16% to $493.3 Million; Backlog Value Up 33% to $744.7 Million

KBH – Three Months Ended August 31, 2012

  • Revenues increased 16% to $424.5 million, compared to $367.3 million for the third quarter of 2011, reflecting growth in the number of homes delivered and a higher average selling price.
  • The housing gross profit margin improved to 17.5%, up 60 basis points compared to 16.9% in both the third quarter of 2011 and the second quarter of 2012.
  • While the Company delivered more homes, generating higher related revenues and associated selling expenses, its selling, general and administrative expenses of $62.8 million in the current quarter were up only slightly from $60.2 million in the same quarter a year ago. Additionally, the year-earlier quarter included the favorable impact of legal expense recoveries of $8.3 million.
  • The Company’s homebuilding operating income increased significantly to $10.9 million in the current quarter, up from $1.4 million in the year-earlier quarter.
  • Interest expense totaled $23.1 million, up from $12.3 million in the year-earlier quarter.
  • Net income totaled $3.3 million, up $12.9 million from the net loss of $9.6 million in the year-earlier quarter. The Company’s earnings per diluted share of $.04 represented a considerable improvement from the loss per diluted share of $.13 in the year-earlier quarter.

“We are pleased to report a profit for the third quarter,” said Jeffrey Mezger, president and chief executive officer. “During the quarter, we continued to generate improvement in several key financial and operating metrics. The favorable year-over-year performance in our deliveries; revenues; operating income; net orders; and backlog were particularly encouraging as we operated with fewer communities. These trends illustrate that the strategic repositioning of our operations to restore profitability is starting to yield tangible results, as we also saw significant increases in our overall average selling price and gross profit margin, and substantial improvement in our selling, general and administrative expense ratio. At the same time, it is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise. In particular, we are seeing dramatic improvement in California, where we are the state’s largest homebuilder, as the continued strengthening in the coastal markets is now spreading inland to Sacramento, the Central Valley and the Inland Empire.”

About KB Home – KBH

KB Home (KBH) is one of the largest and most recognized homebuilding companies in the United States. Since its founding in 1957, KBH has built more than half a million quality homes. KBH’s signature Built to Order™ approach lets each buyer customize their new home from lot location to floor plan and design features.

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edliston
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.

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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.

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