KB HOME (NYSE: KBH) reported Q3 EPS of $0.28, $0.12 worse than the analyst estimate of $0.40. Revenue for the quarter came in at $589.2 million versus the consensus estimate of $646.8 million.

Adjusted housing gross profits in the quarter were $111.22 million, from $105.35 million in the prior-year quarter.

• The Company delivered 1,793 homes in the third quarter, compared to 1,825 homes delivered in the year-earlier quarter. Deliveries in the quarter were tempered by delays in construction schedules and customer mortgage loan closings that resulted in some deliveries being deferred to the fourth quarter.
• The overall average selling price rose 9% to $327,000, up from $299,100 for the same period of 2013. The Company’s average selling price has now increased on a year-over-year basis for the last 17 quarters.
  • The average selling price increased primarily due to the Company’s continued positioning of its new home communities in land-constrained submarkets that typically feature higher household incomes, higher median home sales prices and stronger demand for larger home sizes, as well as generally favorable market conditions.
  • Average selling prices were higher in all of the Company’s homebuilding regions compared to the same quarter of 2013, with increases ranging from 9% in the Central and Southeast regions to 21% in the West Coast region.

Backlog and Net Orders

• Potential future housing revenues in backlog at August 31, 2014 grew 37% to $1.10 billion from $808.5 million at August 31, 2013. This represented the Company’s highest quarter-end backlog value since the third quarter of 2008.
  • The year-over-year growth in the Company’s backlog value reflected both an increase in the number of homes in backlog and a higher overall average selling price.
  • The Company’s backlog at August 31, 2014 was comprised of 3,432 homes, up 13% from 3,039 homes in backlog at August 31, 2013.
• Total net order value in the 2014 third quarter rose 19% to $629.2 million, up from $528.9 million in the year-earlier quarter. This marked the 10th straight quarter of year-over-year increases in net order value.
  • Three of the Company’s four homebuilding regions reported year-over-year growth in net order value, ranging from 11% in the Central region to 35% in the West Coast region. The Company’s Southeast region net order value was essentially flat with the same quarter a year ago.
• Net orders increased 5% to 1,827, up from 1,736 for the year-earlier quarter, reflecting the Company’s higher average community count and its emphasis on balancing home sales prices and sales pace to optimize the performance of its new home communities.
  • In the Company’s West Coast homebuilding region, net orders grew 24% from the year-earlier quarter.
  • The third quarter cancellation rate as a percentage of gross orders improved to 31% in 2014 from 33% in 2013. As a percentage of beginning backlog, the third quarter cancellation rate improved to 24% in 2014 from 27% in 2013.
• The Company’s overall average community count increased 5% to 197 from 187 for the year-earlier quarter.
  • The Company’s third quarter-end community count has increased 20% in the past two years, reflecting the Company’s substantial inventory investments and dedicated efforts to convert those investments into active-selling new home communities.

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