Shares of the KB Home (NYSE:KBH), the homebuilder, up surged on reporting better fiscal second quarter earnings. The firm also beat Wall Street Journal analysts’ expectations both in profit and revenue margins. The healthy earnings growth was attributed by increased home building activity in market.
Last month the U.S home market fell 11 percent, which have surprisingly shaken the U.S home builders’ confidence. But the housing market have recently back on track, as the groundbreakings climbed the most in seven years, according to Commerce Department report published earlier this week. New home contracts jumped 12% last month to an annual rate of 1.275 million, making the highest increase since August 2007. Similarly apartment construction permits surged, while permits for single-family homes, a healthy revenue contributor for builders, hiked moderately.
KB Home posted profit of $9.6 million, or 10 cents a share in the fiscal second quarter, very well below from $26.6 million, or 27 cents a share the firm reported in a year earlier period. Turnover rose 10% to $623 million. The firm bested Wall Street analysts’ expectations of $619 million in revenue and 8 cents a share in earnings, according to Thomson Reuters.
Housing turnover jumped 8% to $604.9 million. The firm’s land-sale unit posted an increase in revenue from $2.6 million to $15.9 million.
The total value of orders booked by the company, which is an important measure in deducing the builder’s future performance, boosted 38% to$1.05 billion, compared to the previous year period. Meanwhile, net orders spiked 33% to 3,015 homes.
The Los Angeles, California-based firm’s backlog as of May 31 was 4,733 homes, 39% boost from the same period a year earlier. The average transaction price hiked 6% to $338,500.
