KB Home Reports Profit as U.S. New-Home Sales Surge
KB Home (KBH), the best-performing U.S. homebuilder stock in the past month, reported a profit for its fiscal second quarter as selling prices and orders increased.
Net income for the three months through May was $26.6 million, or 27 cents a share, compared with a loss of $3 million, or 4 cents, a year earlier, the Los Angeles-based company said today in a statement. The results beat the average analyst earnings estimate of 21 cents a share, according to data compiled by Bloomberg.
Sales of newly built homes in the U.S. have surged as improving employment and consumer confidence give the housing market a lift in the busiest selling season. Purchases (NHSLTOT) of new houses, tabulated when contracts are signed, jumped 18.6 percent in May, the biggest one-month gain since January 1992, according to figures from the Commerce Department. Publicly traded builders including KB Home have been increasing prices to take advantage of a tight supply of available properties.
“We extended our trend of generating solid earnings improvement in the second quarter, and remain focused on accelerating profitable growth,” Jeffrey Mezger, president and chief executive officer of KB Home, said in the statement.
Revenue in the quarter rose 8 percent from a year earlier to $565 million. Net orders increased 5 percent to 2,269 homes. The company’s contract backlog, an indication of future sales, climbed 9 percent to 3,398 homes. The average selling price increased 10 percent to $319,700.
The results were released before U.S. markets opened. KB Home yesterday fell 0.3 percent to $17.88. The stock has gained 7.6 percent in the past month, the best performance in the 11-company Standard & Poor’s Supercomposite Homebuilding Index, which advanced 2.2 percent.