The signals are multiplying that a recovery in home construction is taking place. Earlier this week the S&P Case-Shiller housing price index showed a gain for the first time in seven months. The US Census Bureau reported new home sales at a two-year high and new building permits also rose sharply. This morning homebuilder KB Home (NYSE: KBH) reported second quarter results that keep the ball rolling.
KB Home reported an EPS loss of $0.31 compared with a consensus estimate for a loss of $0.34. Revenue totaled $302.9 million, higher than the estimate of $301.3 million. The only downside is that KB’s net loss of $24.1 million included a one-time tax benefit of $4.5 million. Backing that out pulls the company’s EPS loss to $0.37. Lennar Corp. (NYSE: LEN), which reported earnings earlier this week, posted EPS of $0.21, excluding a tax benefit of $1.85/share.
Earnings aside for the moment, gross margins, excluding certain items, at KB Home improved from 14.9% in the same period a year ago to 20.3% this year. The average selling price rose 9% and deliveries of new homes rose 2%.
That’s all good news. As with Lennar, KB Home’s backlog also rose by 22% and the value of the backlog rose by 38% year-over-year. Orders are also up 3% for the quarter.
Shares of KB Home are up more than 10.5% in the pre-market at $9.62 in a 52-week range of $5.02-$13.12.
Other homebuilders’ stocks are getting a boost too: Lennar is up more than 2.7%, PulteGroup Inc. (NYSE: PHM) is up 4.2%, Hovnanian Enterprises Inc. (NYSE: HOV) is up nearly 5%, Toll Brothers Inc. (NYSE: TOL) is up 1.6%, and D.R. Horton Inc. (NYSE: DHI) is up 3.5%.
Paul Ausick
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