KB Home Soaring After Q3 Results
Shares of KB Home (NYSE: KBH) are rising sharply in early trade on Friday after the company released its fiscal third-quarter earnings results prior to the opening bell. At last check, the stock had risen more than 8 percent and was trading at $14.18.
The shares have been trending up on an intra-day basis, after opening the session at $13.35. After today's rally, KBH has now risen nearly 36 percent in the last month on increased optimism about the housing market.
The company's earnings results were above Wall Street expectations, driven by higher home deliveries, an increase in selling prices and higher margins. KB Home said that it delivered 1,720 home during the quarter, a 7 percent increase from the year earlier period. Selling prices rose 8 percent to $245,100.
Jeffrey Mezger, president and chief executive officer of the company said, "During the quarter, we continued to generate improvement in several key financial and operating metrics. The favorable year-over-year performance in our deliveries; revenues; operating income; net orders; and backlog were particularly encouraging as we operated with fewer communities."
For the quarter, KB Home reported net income of $3.26 million or $0.04 per share, compared to a loss of $9.65 million or $0.13 per share, in last year's third-quarter. The results included a tax benefit of $10.7 million. This compared to Wall Street consensus EPS estimates of a loss of $0.16.
Revenues in the period were up 16 percent to $424.5 million. This missed Wall Street consensus revenue estimates of $430.03 million.
As investors become more optimistic about the future prospects of the housing market, KBH has become a leading momentum play in the market. The stock is sitting at new 52-week highs, and is trading 32 percent above its 50-day moving average and nearly 52 percent above the 200-day. Its RSI reading above 75 indicates that KBH is experiencing strong momentum, but could be due for a pullback next week as the name is getting overextended in the near-term.
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