KB Home (KBH), a prominent U.S. homebuilder, delivered impressive third-quarter financial results, exceeding analyst expectations on both revenue and earnings. The company’s revenue for the quarter reached $1.75 billion, surpassing the projected $1.728 billion. Earnings per share also outperformed estimates, coming in at $2.04 compared to the expected $2.02.
This marks the seventh consecutive quarter where KB Home has surpassed analyst forecasts for both revenue and earnings, demonstrating a consistent track record of strong performance. Total revenue grew by 10% year-over-year, while earnings climbed 13%. KB Home delivered 3,631 homes during the quarter, representing an 8% increase from the same period last year.
Despite a dip in demand during June and July, driven by concerns regarding elevated mortgage rates and the broader economic outlook, KB Home witnessed a rebound in August. This surge in demand reflects the continued appeal of the company’s affordably priced, personalized homes.
The average selling price for the homes increased by 3% to $480,900, although net orders remained flat year-over-year. Inventories rose by 10% to $5.65 billion.
Jeffrey Mezger, KB Home’s chairman and CEO, expressed optimism about the company’s future prospects: “We experienced variability in demand across the quarter, with softening in late June through July, as buyers continued to evaluate elevated mortgage interest rates, and general economic concerns were rising. As rates moderated in August, our net orders improved. We are encouraged by this strengthening in demand for our affordably priced personalized homes, and the ongoing positive trend we are experiencing so far in our 2024 fourth quarter.”
Demonstrating confidence in its future, KB Home repurchased $150 million of its common stock during the quarter. The company still has $800 million remaining under its buyback program as of August 31.
Looking ahead, KB Home forecasts full-year 2024 housing revenues between $6.85 billion and $6.95 billion. The company expects average selling prices for the full year to reach approximately $490,000.
KB Home will hold a conference call at 5 p.m. ET to discuss these results in detail. During the call, the company will provide guidance for the fourth quarter.
KB Home shares were up nearly 40% year-to-date before the release of these financial results. However, the stock experienced a decline of 6.10% in after-hours trading at $82.10 at the time of publication on Tuesday.
