KB Home Earnings Cheat Sheet: Loss Widens but Beats Estimates

KB Home (NYSE:KBH) reported its results for the third quarter. KB Home constructs and sells homes through its operating divisions across the United States under the name KB Home. It operates a homebuilding and financial services business serving homebuyers in markets nationwide.

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KB Home Earnings Cheat Sheet for the Third Quarter

Results: Loss widened to $9.6 million (13 cents per diluted share) from $1.4 million (loss of 2 cents per share) in the same quarter a year earlier.

Revenue: Fell 26.7% to $367.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: KBH beat the mean analyst estimate of a loss of 17 cents per share. It fell short of the average revenue estimate of $380.8 million.

Quoting Management: “We achieved encouraging operational and financial results in the third quarter despite the ongoing difficult housing environment,” said Jeffrey Mezger, president and chief executive officer. “We generated year-over-year growth in both net orders and backlog in all four of our operating regions. We also improved our bottom line results by narrowing our net loss substantially from the second quarter, and continued our sequential improvement in key financial metrics in 2011, including our housing gross margin and selling, general and administrative expense ratio. During the quarter, we repaid $100 million of senior notes at their scheduled maturity, while remaining focused on maintaining an ample cash balance. Our next scheduled debt maturity is in 2014.”

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 27.4% to $271.7 million in the second quarter. The figure fell 25.4% in the first quarter from the year earlier and dropped 33.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the second quarter, it missed the mark by 24 cents, and in the first quarter, it fell short by 63 cents.

Competitors to Watch: PulteGroup, Inc. (NYSE:PHM), The Ryland Group, Inc. (NYSE:RYL), Lennar Corporation (NYSE:LEN), D.R. Horton, Inc. (NYSE:DHI), M.D.C. Holdings, Inc. (NYSE:MDC), Toll Brothers, Inc. (NYSE:TOL), Hovnanian Enterprises, Inc. (NYSE:HOV), NVR, Inc. (NYSE:NVR), Standard Pacific Corp. (NYSE:SPF), and California Coastal Communities, Inc. (CALCQ).

Stock Performance: Shares of KBH are unchanged from the previous close of $5.72.

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(Source: Xignite Financials)