KB Home (NYSE: KBH) reported second-quarter 2014 results before markets opened Friday. The homebuilder posted diluted earnings per share (EPS) of $0.27 on revenues of $565 million. In the same period a year ago, KB Home reported an EPS loss of $0.04 on revenue of $524.4 million. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.20 and $563.1 million in revenue.
The company offered no guidance, but the consensus estimates for the third quarter calls for EPS of $0.36 on revenues of $666.46 million. For the full year, the EPS estimate is $1.16 on revenues of $2.44 billion.
KB Home said that it delivered 1,751 homes in the second quarter, down slightly from 1,797 delivered in the same period a year ago. The average selling price increased by $29,300 to $319,700. The increase was largest in the company’s Southwest region.
The company’s CEO said:
Increasing the number of new home communities we have open for sales remains a top priority for us. We acquired several attractive large land positions and substantially advanced our land development in the second quarter to reinforce the upward trajectory of our business. We expect to measurably expand our community count into 2015 with the significant investments we are making in our land pipeline.
Gross profit margins came in at 18.9%, up from 15.1% in the year-ago quarter. The sequential profit margin gain was 1.4%. Housing backlog is up 24% on a dollar basis going into the third quarter of 2014 and up 9% on a number of homes basis.
Like Lennar Corp. (NYSE: LEN), which reported results Thursday, demand for new homes allowed KB Home to raise its prices and improve its margins. Both homebuilders have solid backlogs of new orders going into the second half of the year as well.
Shares were up about 2.2% in premarket trading Friday morning, at $18.28 in a 52-week range of $15.40 to $20.78. Thomson Reuters had a consensus analyst price target of around $19.50 before the results were announced.