UPDATE: KB Home Shares Rise After Q4 Results

Shares of

climbed more than 5% in pre-market trading after the company reported fourth-quarter results. The Los Angeles, California-based company posted quarterly net income of $852.8 million, or $8.36 per share, versus earnings of $28.1 million, or $0.31 per share, in the year-ago period. The latest quarter net income figure included an income tax benefit of $824.2 million. Its revenue climbed 29% to $796 million in the quarter. Analysts were expecting earnings of $0.56 per share on revenue of $775 million. Total net order value climbed 22% to $587.4 million from $481.7 million, while net orders rose 10% to 1,706 from 1,556. KB Home delivered 2,229 homes during the quarter, up 9% versus 2,038 homes in the year-ago period. The overall average selling price increased 17% to $351,500 from $301,100 in the quarter. Homebuilding operating income shrank to $30.0 million, from $47.0 million. The financial services operations posted pretax income of $3.4 million, compared to $3.1 million in the year-ago period. KB Home ended 2014 with 227 communities open for sales, up from 191 communities a year earlier. At November 30, 2014, cash, cash equivalents and restricted cash totaled $383.6 million, compared to $572.0 million at November 30, 2013. Inventories rose to $3.22 billion at November 30, 2014, versus $2.30 billion at November 30, 2013. “The commitment and focus of our team throughout 2014 produced significant improvements in our financial and operational results,” said Jeffrey Mezger, president and chief executive officer. “A particularly notable accomplishment in the fourth quarter was the reversal of nearly all of our deferred tax asset valuation allowance. This reversal, grounded in our consistent profitability in recent quarters, as well as our positive outlook for our business, the housing market and the broader economy, had a measurable impact on our financial position. Among other things, it nearly tripled our stockholders' equity from a year ago, significantly reduced our debt leverage ratio, and, going forward, is expected to shelter, on a cash basis, more than two billion dollars of future earnings from income taxes. All of this will meaningfully support our ability to advance our business goals.” KB Home shares rose 5.25% to $17.44 in pre-market trading.