|Homebuilder KB Home $KBH reported lower 4Q16 earnings despite revenue rising 20.81% to $1.19 billion, topping estimates for $1.15 billion. Earnings was down 7% from a year earlier to $0.40 per diluted share from $44.02MM or $0.43 per diluted share a year ago but beat expectations by a penny. Profits were hurt by increased costs. |
Orders rose 20% on the year, net order value grew 27% to $855.9 Mil. Its backlog grew 19% for the quarter to $1.52 billion, the best year-end level since 2006. The average selling price rose 2% vs. a year earlier to $387,400.
Reaction: KB Home NYSE: KBH After-hours: $17.05 +0.45 +2.71% after shares closed up 2.1% to 16.60 today.
"With healthy net order activity in the fourth quarter contributing to our highest backlog value level in 10 years, we are entering 2017 with strong momentum," said Jeffrey Mezger, KB Home's chairman and CEO.
KBH's Homebuilding operating income for 4Q16 decreased 20% from 4Q15 to $56MM.
In 2016 KBH repurchased about 8.4MM shares of its common stock at a total cost of $85.9MM, while improving its ratio of debt to capital to 60.5% and ratio of net debt to total capital to 54.3%.
Inventories were $3.4Bil, with investments in land acquisition and development totaling $1.36Bil for the year ended Nov. 30, 2016.https://alphastreet.com/app#/home
In 4Q16 KBH generated a 21% increase in housing revenues driven by increases in deliveries across all four of its regions, with the most pronounced growth coming from the West Coast region.
During 4Q16, the company achieved 3.3 net orders per community per month reflecting an increase of 30% YoverY with improvement in each of its four regions.
KBH stated that land spend for 2016 totaled $1.4Bil. In terms of specs, the company was a little bit over one finished spec for a community. $KBH was at 378 at the end of 4Q16 in terms of finished specs.Guidance:
For 1Q17 KBH expects to generate housing revenues of $760-820MM. For full-year 2017, the company anticipates housing revenues in the range of $3.8-4.2Bil. For 1Q17, $KBH is projecting overall average selling price to be $360,000-365,000. Overall ASP for 2017 is expected to be $370,000-385,000, representing an increase of 2-6% versus 2016.
For full-year 2017, the company expects Homebuilding operating income margin, excluding the impact of inventory-related charges, to be 5.7-6.3%. Full-year 2017 GM is expected to be 16-16.5%. Effective tax rate for 2017 is expected to be 39%.
KBH said there is a balance of margin and absorption that will get the highest returns on investments. The company is approaching its targeted absorption and can now work on improving margins. $KBH’s community count was up in California but it was down in Southeast. $KBH is taking advantage of the demand that has emerged with first-time buyers.More Earnings NewsMSC Industrial Direct $MSM Shares up 6% After Earnings Guidance Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent Wells Fargo (WFC) Earnings Preview JPMorgan Chase (JPM) Earnings PreviewBank of America (BAC) Preview Live From The Pit