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Investing.com -- Shares in KB Home (NYSE:KBH) ticked up in after-hours trading after the leading home builder topped quarterly earnings forecasts by a wide margin, amid sharp increases in purchases among first-time home buyers over the previous three months.
During KB Home's second quarter of Fiscal Year 2016, the Los Angeles-based Fortune 500 company saw revenues jump 30% to $811 million, while net profits soared 63% to $16 million driven by double-digit increases in deliveries in all four regions of the U.S. Consequently, KB Homes reported earnings per share of 0.17, up considerably from 0.10 a year earlier and above analysts' forecasts of 0.14. Analysts expected to see revenues of $747.1 million for the three-month period ending on May 31.
KB Home delivered the earnings beat despite a loss of $6.8 million incurred from the company's decision to exit the lucrative Washington D.C. market.
"We delivered a strong second quarter performance," said Jeffrey Mezger, KB Home's president and chief executive officer. "We generated considerable increases in deliveries and revenues, and posted a substantial improvement in earnings, despite charges related to our strategic decision to transition out of the Metro Washington, D.C. area. Our second quarter results reflect the success of our targeted positioning in attractive growth markets and the distinctive home-buying experience we offer to consumers."
Although the U.S. Commerce Department said housing starts nationwide fell 0.3% on a monthly basis in May, the figure was still up by roughly 10% over the previous 12 months.
"We believe we are particularly well-positioned to leverage our strength in serving the demand from this demographic with dynamic product offerings," Mezger added. "With favorable market trends and our financial and operational progress in the first half of the year, we have positive momentum in our business heading into the remainder of 2016."
Shares in KB Home rose 0.22 or 1.51% to 14.76.