Homebuilder KB Home (KBH) reported a 15% jump in earnings for the fourth quarter helped by the reduction in federal corporate income tax rate. The bottom exceeded analysts’ expectations, while the top line came in line with consensus. Following this, the stock inched up over 4% in the after-market session.
Net income for the quarter grew 15% to $96.8 million, and earnings increased 14% to $0.96 per share. The recent tax act lowered the effective tax rate by 36 basis points. However, revenue fell 4% to $1.35 billion due to lower homebuilding revenue.
The company delivered a total of 3,389 homes during the quarter, up 1.5% compared to last year. The average selling price of a single residential unit declined 5% to $395,200 due primarily to a shift in geographic mix of homes delivered.
Net orders for the fourth quarter fell 12.3% to 2,013, and net order value dropped 21.1% to $738.3 million. The number of homes in ending backlog decreased 7% to 4,108 and ending backlog value plunged 14% to $1.43 billion. The decrease in backlog value reflects fewer homes in backlog and the lower average selling price of those homes due to a shift in geographic mix.
The company had total liquidity of $1.05 billion as of November 30, 2018, including cash and cash equivalents of $574.4 million. Inventories increased by 10% to $3.58 billion. Stockholders’ equity increased by $161.2 million to $2.09 billion.
Shares of KB Home ended Wednesday’s regular session up 4.12% at $21.98 on the NYSE. The stock has fallen over 35% in the past year and over 1% in the past three months.