KB Home Shares Slip Even as Orders for New Houses Beat Estimates
(Bloomberg) -- KB Home reported quarterly orders that beat estimates as the pandemic housing boom plowed ahead.
- For the three months through February, signed purchase contracts rose 23% from a year earlier to 4,292, the Los Angeles-based builder said in a statement Wednesday. The average estimate of analysts surveyed by Bloomberg was 4,110. Investors may have expected more: The shares dropped in late trading.
- The order total was the highest for the company’s fiscal first quarter in 14 years. Deals rose in all of the company’s four regions.
- Buyers have flocked to new construction as the inventory of existing homes has gone scarce. Americans have been eager to lock in low mortgage rates and upgrade to bigger houses in the suburbs.
- Revenue for the quarter was $1.14 billion, missing the average analyst estimate of $1.22 billion.
- While KB Home sold more homes, its average community count for the quarter fell 11% to 223. The company will need more communities for a steady stream of growth.
- Builders face higher expenses for land and labor and can only increase home prices so much. Buyers will be limited in how much they can spend as borrowing costs rise. KB Home’s average selling price in the quarter rose just 2% to $397,100.
- KB Home shares fell as much as 4.1% in trading after markets closed in New York. Through Wednesday’s close, they had climbed 29% this year, one of the best performances in an S&P index of homebuilder stocks, which gained 18%.
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