Homebuilder KB Home (KBH) reported a 74% jump in earnings for the third quarter helped by continued growth in its core homebuilding business. The bottom came in above analysts’ expectations, while the top line missed consensus. The strong results, which came at a time the housing market is facing headwinds, helped the company’s stock reverse its downtrend and gained over 5% in the after-hours session.
Net income for the quarter climbed 74% to $87.5 million, and earnings soared 71% to $0.87 per share. Revenue increased 7% to $1.23 billion helped by healthy demand in its served markets and effective execution on its distinctive customer-centric operating model.
The company delivered a total of 2,988 homes during the quarter, up 8% compared to last year. The average selling price of a single residential unit declined slightly to $408,200.
Net orders for the third quarter increased 3% to 2,685, while net order value fell 5% to $1.02 billion. The number of homes in ending backlog increased slightly to 5,484 while ending backlog value decreased 4% to $2.04 billion. The decrease in backlog value was mainly due to a shift in geographic mix from its West Coast region.
Meanwhile, investors are concerned on what JPMorgan calls a “fairly tepid” housing recovery. Adding more woes, Freddie Mac estimates annual home sales to come just below last year. Also, the housing and other economic data may be clouded in coming months by fallout from Hurricane Florence.
Shares of KB Home ended Tuesday’s regular session down 0.94% at $25.29 on the NYSE. The stock had fallen over 20% for the year so far, while it had risen more than 19% for the past year.
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