KB Home (KBH) Tops Q3 EPS by 29c, Revenues Beat

KB Home (NYSE: KBH) reported Q3 EPS of $0.83, $0.29 better than the analyst estimate of $0.54. Revenue for the quarter came in at $1 billion versus the consensus estimate of $893.24 million.

• Gross Margin Expanded to 19.9%, Up 140 Basis Points
• Net Order Value Rose 29%; Backlog Value Increased 12% to $2.6 Billion

“We produced solid results in our third quarter, moving beyond the disruption associated with the early stages of the COVID-19 pandemic that we experienced in the spring. While our deliveries were lower compared to a year ago, our profitability rose meaningfully, led by a housing gross profit margin of 20.6%, excluding inventory-related charges, driving a 14% increase in our diluted earnings per share,” said Jeffrey Mezger, Chairman, President and Chief Executive Officer.

“Housing market conditions strengthened during the third quarter, fueled by the combination of historically low mortgage interest rates, a limited supply of resale inventory and consumers’ desire to own a single-family home,” continued Mezger. “Reflecting this strength, our net orders expanded 27% year over year, with growth in each of our four regions. We achieved a monthly absorption pace that accelerated to 5.9 orders per community, an increase of 36%, while we also increased prices in most of our communities. We believe that our Built-to-Order model is a key factor driving our sales pace, with this quarter’s results underscoring the robust demand for the choice and personalization we offer to our homebuyers."

“As we look ahead to 2021, assuming market conditions remain favorable, we believe we are well positioned to expand our scale, and, with a leaner and more efficient operation, we anticipate accelerating our profitable growth next year, as we remain focused on generating higher returns,” concluded Mezger.

For earnings history and earnings-related data on KB Home (KBH) click here.

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