Tuesday, March 23, 2010 9:03:15 AM
DOW JONES NEWSWIRES
KB Home's (KBH) fiscal first-quarter loss narrowed amid lower write-downs and
Chairman and Chief Executive Jeffrey Mezger said the company expects to return
to profitability "in the latter part of this year."
"Encouraging data in recent months suggest that a number of housing markets
may be stabilizing or starting to rebound, though we do not yet see, in many
respects, a sustained nationwide recovery," Mezger said. "While the pace is
likely to be uneven in the months ahead, we currently expect housing market
conditions to follow a generally positive trajectory throughout this year and
into 2011."
But KB's shares fell 4% premarket to $16.75 as the latest results were worse
than analysts expected. As of Monday's close, shares had risen 34% in the past
year, trailing the broader market.
Like many other home builders, KB has struggled, posting repeated losses amid
a sharp drop in demand during the recession. The housing market has shown
recent signs of stabilization as a host of consumers have taken advantage of an
$8,000 first-time homebuyer tax credit.
For the quarter ended Feb. 28, KB Home reported a loss of $54.7 million, or
71 cents a share, narrower than a year-earlier loss of $58.1 million, or 75
cents. The results included of inventory- and land-related write-downs of $13.4
million and $32.3 million, respectively. Revenue dropped 14% to $264 million.
Analysts polled by Thomson Reuters had most recently forecast a loss of 42
cents on $276 million in revenue.
Housing gross margin rose to 13.7% from 4.9%.
Net orders rose 4.7% to 1,913 while the backlog is 6.4% lower at $523
million. The number of homes delivered fell 8.2% in the latest quarter to
1,326, and average selling price dropped 6.2%. The cancellation rate improved
to 22% from a year-earlier 28%.
Ticonderoga Securities last month labeled KB's stock a buy, saying that
while many builders "sat in suspended animation" as the housing market chilled,
KB "has continually been two steps ahead of the industry in both anticipating
and reacting to the solution." The builder got rid of land early in the
downturn and spotted entry-level opportunity ahead of its peers, Ticonderoga
said.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most
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(END) Dow Jones Newswires
03-23-10 0824ET
Copyright (c) 2010 Dow Jones & Company, Inc.
08:24 032310
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