Dec. 21 (Bloomberg) -- KB Home, the Los Angeles-based homebuilder that targets first-time buyers, reported a quarterly profit that beat analysts’ estimates as sales and orders rose.
Net income for the fourth quarter ended Nov. 30 was $13.9 million, or 18 cents a share, compared with $17.4 million, or 23 cents, a year earlier, the company said in a statement today. Analysts expected a profit of 3 cents a share, the average of 16 estimates in a Bloomberg survey.
KB Home has cut costs and added communities in California and Texas, where the builder is betting will recover more quickly from the real estate slump. U.S. housing demand, which has been weighed down by sluggish job growth, tight credit and a looming supply of foreclosures, is showing signs of improvement.
“We’re seeing some positive signs for housing in general,” Steve Blitz, senior economist at ITG Investment Research Inc. in New York, said yesterday. KB Home is “set up nicely to generate some decent revenue in the coming 12 to 18 months, assuming the housing market does better,” he said.
Housing starts rose 9.3 percent in November from the previous month to a 685,000 annual rate, the most since April 2010, the Commerce Department said yesterday. While multifamily construction accounted for much of the increase, single-family home starts jumped 2.3 percent, the most since June.
KB Home’s fourth-quarter revenue increased 6 percent from a year earlier to $479.9 million, and deliveries rose 4 percent to 1,995. Net orders rose 38 percent to 1,494.
“These results demonstrate our success in adapting to current market realities and positioning our business for the future,” Chief Executive Officer Jeffrey Mezger said in the statement.
The results were announced before the start of regular U.S. trading. KB Home shares have lost 43 percent this year, compared with a 7 percent drop in the 12-member Standard & Poor’s 1500 Homebuilding Index.