Thursday, March 31, 2011

KB Home (NYSE: KBH): Q1 Earnings Preview 2011

KB Home

KB Home (NYSE: KBH) is scheduled to release fiscal first quarter earnings before the opening bell on Tuesday, April 05, 2011. Analysts, on average, expect the company to report a loss of $0.27 a share on revenue of $224.20 million. In the year ago quarter, the company reported a loss of $0.71 per share on revenue of $263.98 million.

KB Home constructs and sells homes in the United States. The company builds various types of homes, including attached and detached single-family homes, townhomes, and condominiums, designed primarily for first-time, first move-up, and adult buyers. It also offers mortgage services in a joint venture with Countrywide KB Home Loans. The company is primarily going after the first time home buyer, which is one area of the market that appears to be improving.

In the preceding fiscal fourth quarter, the Los Angeles, California-based company's net income was $17.44 million or $0.23 per share, sharply lower than $100.72 million or $1.31 per share in the prior-year quarter. Revenue declined 33% to $450.96 million from $674.57 million in the same quarter last year. Analysts, on average, expected the company to report a loss of $0.17 per share on revenue of $441.32 million.

At its last earnings call in January, CEO Jeffrey Mezger said that demand will be soft and the recovery a slow one for consumer confidence, but that the economy appears to be recovering. While the company doesn't expect to be profitable in the first quarter, it does expect a profitable year. Investors sent KB Home stock up over 6% after the earnings report.     
There appears to be a continuing lack of recovery in the housing market.Home builders like KB Home have continued to struggle lately despite strength across the broader economy. Home prices are still falling due to the robust pipeline of foreclosures. 

In terms of stock performance, KB Home shares have lost nearly 24% over the past year.

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