KB Home (KBH) 2021 Q1 Earnings Review

The history of KB Home (NYSE:KBH) dates back to 1956 when Donald Kaufman and Eli Broad started building two model houses in the Northeast Detroit suburbs. Their model houses became famous, and the positive feedback helped them to build and sell 600 homes in the first two years. KB Home grew over the years by stepping into new markets and acquiring other homebuilders. Today, it is one of the top home builders in America, operating in 45 markets across 8 states.

The Los Angeles, California-based home building company recently announced mixed financial results for the first quarter. KBH reported earnings of $97.5 million, or $1.02 per share for the three months ended February 28, well above $59.7 million, or 63 cents per share in the same period of 2020. Analysts on average were looking for earnings of 92 cents per share.

Revenue for the quarter rose 6 percent on a year-over-year basis to $1.14 billion, missing the consensus forecast of $1.21 billion. Home deliveries increased 4 percent to 2,864 in the quarter, while the average selling price inched up 2 percent to $397,100.

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Speaking on the results, CEO Jeffrey Mezger said, “We begin 2021 with positive momentum continuing across our business. We achieved a 62% increase in our first quarter diluted earnings per share primarily driven by substantial growth in our gross margin to 21.1%, excluding inventory-related charges. Multiple factors contributed to our significantly higher profitability, in particular, our effective management of order pace, price and starts to optimize our assets and generate a strong return on each community.”

KBH stock rose over 2 percent on Thursday following the results. Overall, the stock has performed well this year by rising more than 35 percent on a year-to-date basis.

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