KB Home (NYSE:KBH)
KB Home, one of the biggest names in home building companies in the United States, reported their second quarter earnings on June 27, 2017 after the market closed. The company easily beat analyst’s estimates which had them coming in at $0.26 per share.
The company reported profits of $.33 cents per share which beat current estimates by about 27%. Not only were their earnings up, but the average selling price of one of their homes increased by 11% to $385,000.
The margin of profit per home also increased by about 5%. The company also benefited from lower costs of operating the business in general, specifically at the administrative level dropping by 1.2%.
The company pays a yearly dividend of about $0.10 per share which equates to almost a half a percent per year. This helps to keep the stock price in a somewhat predictable and supportable level for investors who like to earn a dividend on their long term holdings.
The shares have traded in a 52-week Range from a low of $14.02 to a high of $23.16. The shares closed the day at $22.82 which was down $0.04 on the day. However in the after market trading session, shares closed up $0.23 or at $23.05.
In a market that saw all major indices take a blood bath late in the day on Tuesday affecting 90 + percent of all stocks traded, KB Home showed magnificent resilience being able to close up on the day. Many eyes will be watching this name as well as its peers when trading opens up on Wednesday morning.
Company Comments
Jeffrey Mezger, chairman, president and chief executive officer offered up many comments:
“Our strong second quarter performance, particularly our 24% revenue growth, reflects our ongoing efforts to increase the scale of our business and continue the steady operational execution that are driving improvements in our profits, returns and other financial metrics, Specifically, we produced measurable expansion of our operating income margin which, combined with our backlog growing to $2.2 billion, positions us for continued meaningful improvement in our results. Looking forward, we remain committed to delivering value to our customers and stockholders and, based on the advancements we have made in the first half of the year, as well as our positive outlook, we are raising our 2017 full-year financial targets.”
“The housing market recovery continues on a steady path, supported by favorable industry fundamentals, Recent improvements in consumer sentiment and employment, combined with relatively low mortgage interest rates, are signaling further strength in the demand for housing. At the same time, the supply of available homes in many areas across the country remains insufficient to satisfy current needs. Given these dynamics in most of our served markets, and our present backlog level, we believe we are well positioned for continued growth with our strong product offerings, compelling customer value proposition and desirable community locations.”
The Price Chart
The above price chart shows the daily price action from the beginning of 2017 up until the present. The red trend line is the area that the shares have seen resistance at and the green line is where they found support at. The 45° angle is one that many technical analyst’s find to be able to be supported for longer-term trends. When the angle steepens too much more severe pullbacks or retracements can occur.
Company Profile
KB Home operates as a homebuilding company in the United States. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. The company also provides property and casualty insurance, as well as earthquake, flood, and personal property insurance to its homebuyers; title services; and mortgage banking services, including residential mortgage loan originations to its homebuyers.
It has operations in California, Arizona, Nevada, Colorado, Texas, Florida, and North Carolina, The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.