KB Home (NYSE:KBH), which was primarily focused on first-time buyers, jumped in midday trading after reporting its first first-quarter profit in seven years as revenue and prices surged.
KB Home rose 7.2 percent to $18.96 at 2:35 p.m. in New York, trimming losses in the past 12 months to 9.5 percent.
Net income was $10.6 million, or 12 cents per share, in the three months ended Feb. 28, compared with a loss of $12.5 million, or 16 cents per share, a year earlier, the Los Angeles-based company said in a statement today. It was the first time KB Home had a profit for the first quarter since 2007. Analyst had predicted earnings of 9 cents per share, according to Bloomberg.
Revenue grew 11 percent to $450.7 million.
New home orders, a key indicator for builders who do not book revenue on a house until the sale is completed, rose 6 percent to 1,765 units. KB Home's backlog rose 4 percent to 2,880 homes as of the end of the quarter.
KB Home said its overall average selling price rose 12 percent in the first quarter, with the West Coast outpacing the Southwest, Central and Southeast regions.
“We are entering the spring selling season positioned with more communities open in attractive locations across the country,” Chief Executive Officer Jeffrey Mezger 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.”
U.S. homebuilders are benefiting from a recovering economy as buyers become more confident and adjust to the higher interest rates.
The company's overall deliveries fell 3 percent to 1,442 homes in the quarter. While deliveries in the Southwest, Central and Southeast regions rose, deliveries slumped 32 percent in the West Coast, due to a lower backlog at the start of the quarter.
