KB Home Increases Sales but Misses Estimates on Earnings

KB Home (NYS: KBH) reported earnings on Friday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q1), KB Home whiffed on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and GAAP loss per share dropped.

Gross margins dropped, operating margins were steady, and net margins grew.

Revenue details
KB Home chalked up revenue of $254.6 million. The 15 analysts polled by S&P Capital IQ predicted a top line of $337.7 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $196.9 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at -$0.48. The 14 earnings estimates compiled by S&P Capital IQ predicted -$0.23 per share on the same basis. GAAP EPS were -$0.59 for Q1 versus -$1.49 per share for the prior-year quarter.


Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was -11.5%, 2,520 basis points worse than the prior-year quarter. Operating margin was -11.5%, about the same as the prior-year quarter. Net margin was -18.0%, 4,020 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $363.2 million. On the bottom line, the average EPS estimate is -$0.20.

Next year's average estimate for revenue is $1.68 billion. The average EPS estimate is -$0.43.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 572 members rating the stock outperform and 674 members rating it underperform. Among 359 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 129 give KB Home a green thumbs-up, and 230 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on KB Home is hold, with an average price target of $9.72.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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