March 19 (Bloomberg) -- KB Home rose the most in almost three months after the builder reported a fiscal first-quarter profit that beat estimates as revenue and prices soared.
Net income for three months ended Feb. 28 was $10.6 million, or 12 cents a share, compared with a loss of $12.5 million, or 16 cents, a year earlier, the Los Angeles-based homebuilder said today in a statement. It was the first time KB Home had a profit for the first quarter since 2007. The average estimate of 16 analysts was for earnings of 9 cents a share, according to data compiled by Bloomberg.
KB Home, which was primarily focused on first-time buyers, has more recently been opening communities in land-constrained areas where incomes and demand for larger homes are generally greater. Homes sold for an average of $305,200 in the quarter, up 12 percent from a year earlier.
“We are entering the spring selling season positioned with more communities open in attractive locations across the country,” Jeffrey Mezger, president and chief executive officer, said in the statement. “We are confident that our balanced approach to sales price and pace, combined with our focus on both top-line growth and profitability, will produce strong results in the coming quarters.”
The shares rose 5.9 percent to $18.72. It was the biggest gain since Dec. 23 and the best performance in the 11-company Standard & Poor’s Supercomposite Homebuilding Index, which advanced 0.6 percent.
Lennar Corp., the largest U.S. homebuilder by market value, advanced 1.8 percent to $41.34. The Miami-based company is scheduled to report earnings tomorrow.
KB Home’s revenue in the quarter increased 11 percent from a year earlier to $450.7 million. The value of net orders was $600.2 million, up 18 percent. The company’s contract backlog, an indication of future sales, climbed 21 percent to $851.6 million.
To contact the reporter on this story: Prashant Gopal in Boston at email@example.com
To contact the editors responsible for this story: Kara Wetzel at firstname.lastname@example.org Christine Maurus