KB Home Reports Narrower Quarterly Loss, Revenue Increase
KB Home, the best-performing U.S. home-builder stock this year, reported a narrower loss for its fiscal second quarter as revenue and selling prices jumped.
The net loss for the three months through May was $3 million, or 4 cents a share, compared with a loss of $24.1 million, or 31 cents, a year earlier, the Los Angeles-based company said today in a statement. The average of 23 analyst estimates was for a loss of 5 cents a share, according to data compiled by Bloomberg.
KB Home and other U.S. builders are benefiting from accelerating demand for new houses amid a tight supply of existing homes on the market. New-home sales rose 2.1 percent last month to an annualized pace of 476,000, the most since July 2008, the Commerce Department said two days ago.
"KB Home is well positioned in some of the strongest housing markets across the country," Jeffrey Mezger, president and chief executive officer, said in the statement. "With the limited supply of homes available for sale and robust demand in many of our served markets, we have deliberately emphasized price and value creation over sales pace."
Revenue in the quarter increased 73 percent from a year earlier to $524.4 million. Net orders rose 6 percent to 2,162 homes. The company's contract backlog, an indication of future sales, climbed 6 percent to 3,128 homes.
The average selling price increased 25 percent to $290,400, the highest for a second quarter since 2006.
The company, which has had losses in four of the past six quarters, has lagged behind other builders including Lennar Corp., Toll Brothers Inc. and D.R. Horton Inc. in returning to profitability.
"KB Home is a turnaround story," Megan McGrath, an analyst at MKM Partners LLC in Stamford, Connecticut, with a buy rating on the stock, said yesterday in a telephone interview. "For them, it's, 'What's the improvement and the trajectory, and how quickly can they narrow the gap with the other builders.'"