KB Home, a Los Angeles-based homebuilder, rose to an almost three-year high after reporting a 54 percent increase in orders for the first seven weeks of its fiscal first quarter.
The company announced the preliminary increase in orders yesterday for the quarter ending in February. In a separate statement, KB Home said it planned to underwrite public offerings of $100 million of stock and $150 million of convertible senior notes due in 2019, and may use the proceeds for land acquisition and development. The announcements were made after the close of regular U.S. trading.
“Order growth so far” in the quarter is “a solid positive surprise,” Michael Rehaut, William Wong and Jason Marcus, analysts at JPMorgan Chase & Co., wrote in a note to clients today. “These initial order results represent material upside to our existing 1Q order-growth estimate of 9 percent, which we now raise to 34 percent.”
Orders totaled 750 for the quarter through Jan. 18, up from 488 a year earlier, KB Home said. The company also said yesterday that it’s using Citigroup Inc. to assemble a syndicate of financial institutions to provide a new secured revolving credit facility of as much as $200 million, with an option to increase it to $300 million.
KB Home climbed 8.9 percent to $18.63 at the close of New York trading. It was the highest price since May 2010. The stock was the biggest gainer among the 11 companies in the Standard & Poor’s homebuilding index, which rose 1.8 percent.