KB Home Earnings Cheat Sheet: Net Income Beats Expectations

KB Home (NYSE:KBH) posted lower net income in the fourth quarter compared with a year-earlier period. 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.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

KB Home Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for KB Home fell to $13.9 million (18 cents per share) vs. $17.4 million (23 cents per share) a year earlier. This is a decline of 20.2% from the year earlier quarter.

Revenue: Rose 6.4% to $479.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: KBH beat the mean analyst estimate of 4 cents per share. It beat the average revenue estimate of $469.6 million.

Quoting Management: “In the fourth quarter, we reported net profits, continued to increase our net orders, and built our backlog to the highest year-end level since 2008,” said Jeffrey Mezger, president and chief executive officer. “We believe these results demonstrate our success in adapting to current market realities and positioning our business for the future. We are pleased that amid weak and turbulent market conditions throughout 2011, we have posted improvements in our deliveries, revenues and selling, general and administrative expense ratio for three consecutive quarters, and generated operating income for two consecutive quarters. With our fourth quarter net orders up 38% from a year ago, and our year-end homes in backlog up 61%, we believe we are moving into 2012 well-positioned to achieve further improvement in our financial metrics.”

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the fourth quarter of the last fiscal year, which saw a 33.1% decrease.

The company’s profit in the latest quarter follows losses in the three previous quarters. The company reported a net loss of $9.6 million in the third quarter, a loss of $68.5 million in the second quarter and a loss of $114.5 million in the first.

The company has now beaten estimates the last two quarters. In the third quarter, it topped expectations with a loss of -13 cents versus a mean estimate of a loss of 17 cents per share.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than three months ago. The average estimate for the first quarter of the next fiscal year has moved from a loss of 26 cents a share to a loss of 23 cents over the last ninety days. Over the past ninety days, the average estimates for the fiscal year has risen from a loss of $2.49 per share to a loss of $2.46.

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).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)