KB Home Earnings: Here’s Why Shares are Down Now

KB Home (NYSE:KBH) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.94%.

KB Home Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 600% to $0.28 in the quarter versus EPS of $0.04 in the year-earlier quarter.

Revenue: Rose 29.33% to $549 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: KB Home reported adjusted EPS income of $0.28 per share. By that measure, the company beat the mean analyst estimate of $0.21. It missed the average revenue estimate of $569.64 million.

Quoting Management: “The momentum we have built in our business continued to fuel our financial performance in the third quarter as we generated strong revenue, net income and earnings per share results,” said Jeffrey Mezger, president and chief executive officer. “We are clearly seeing meaningful top-line and bottom-line benefits from our strategy of investing in attractive land positions across the country, primarily targeting locations with limited housing inventory and higher household incomes. With the goal of increasing our community count, net orders and deliveries, we are aggressively pursuing opportunities to invest in land and land development. In addition, by leveraging the core strengths of our operational business model, including enhancing gross profit margins and managing overhead costs, in combination with maintaining pricing discipline and optimizing the mix of first-time and move-up buyers of our Built to Order homes, we believe we will continue to produce healthy improvements in our financial results.

Key Stats (on next page)…

Revenue increased 4.69% from $524.41 million in the previous quarter. EPS increased to $0.28 in the quarter versus EPS of $-0.04 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.34 to a profit $0.37. For the current year, the average estimate has moved up from a profit of $0.26 to a profit of $0.39 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)