KB Home Posts Q4 Miss; Shares Under Pressure

Shares of

were trading lower by nearly 7 percent at $10.98 early Thursday morning after the company reported its

which fell short of Wall Street's expectations. KB Home announced that it earned $0.43 per share in the fourth quarter on revenue of $985.8 million. Wall Street analysts were looking for the company to earn $0.50 per share on revenue of $1.07 billion. Despite KB Home's results falling short of expectations, the fourth quarter marked the company's 17th consecutive quarter of year-over-year revenue growth as total revenue grew 24 percent from a year ago. KB Home noted that it delivered 2,580 homes in the quarter, up 16 percent from a year ago. The company added that the average selling price of $379,800 also marks an increase of 8 percent from the same quarter a year ago. Net income for the quarter fell to $44.0 million in the quarter from $852.8 million a year ago. However, last year's earnings reflected a deferred tax valuation allowance. "Our fourth-quarter results represent a strong finish to a successful year for KB Home, where we generated substantial improvement in many key metrics, including our highest fourth-quarter pretax income since 2005," said Jeffrey Mezger, president and chief executive officer. "In 2015, we achieved measurable growth and profitability, advanced our core strategies and continued to invest in our operating platform. Of particular importance, we effectively targeted and executed on key initiatives that accelerated our revenues and earnings in the second half of the year and produced sequential improvement in our housing gross profit margin as 2015 progressed." "While inclement weather and trade shortages in certain markets tempered our fourth-quarter deliveries and revenues, we have a positive rhythm in our business and substantial momentum as we enter 2016," continued Mezger. "With our higher backlog giving us strong visibility for potential future deliveries and revenues, and housing market conditions expected to remain generally healthy, we believe we are well-positioned strategically, financially and operationally for further success in 2016. As we move forward, we will remain focused on executing on our strategy, providing an outstanding customer experience, and creating stockholder value."