KB Home (NYSE:KBH) stock rose 1.76% (As on September 25, 11:24:45 AM UTC-4, Source: Google Finance) after the company reported a quarterly per-share profit that was better than Wall Street expectations, even as home deliveries fell and margins came under pressure from price cuts and higher land costs. Net income dropped to $109.8 million from $157.3 million, a year earlier. Homes delivered decreased 7% to 3,393. Average selling price was down slightly to $475,700. Homebuilding operating income was $131.2 million, compared to $189.0 million. The homebuilding operating income margin was 8.1%, compared to 10.8%, mainly due to a lower housing gross profit margin. Excluding total inventory-related charges of $11.3 million for the current quarter and $1.2 million for the year-earlier quarter, the homebuilding operating income margin was 8.8%, compared to 10.9%. The housing gross profit margin was 18.2%, compared to 20.6%.

Moreover, Financial services pretax income totaled $8.7 million, compared to $11.0 million, mainly due to decreases in both insurance commission revenues and equity in income of the Company’s mortgage banking joint venture. The mortgage banking joint venture’s results primarily reflected a decrease in interest rate lock commitments and a lower volume of loan originations, largely due to fewer homes delivered. Inventories increased 6% to $5.84 billion. On a year-over-year basis, inventories grew 3%. Investments in land and land development decreased 7% to $1.95 billion, compared to $2.10 billion. For the 2025 third quarter, land-related investments decreased 39% from the prior-year quarter to $514.1 million. The Company’s lots owned or under contract decreased 15% to 65,251, of which approximately 58% were owned and 42% were under contract. Year over year, the total lot portfolio decreased 6%, down from 69,279. The Company had total liquidity of $1.16 billion, including $330.6 million of cash and cash equivalents and $831.7 million of available capacity under its unsecured revolving credit facility, with $250.0 million of cash borrowings outstanding.

KBH in the third quarter of FY 25 has reported the adjusted earnings per share of $1.61, beating the analysts’ estimates for the adjusted earnings per share of $1.50. The company had reported the adjusted revenue declined to $1.62 billion in the third quarter of FY 25, beating the analysts’ estimates for revenue of $1.59 billion.

KB Home forecast full-year 2025 revenue of $6.1 billion to $6.2 billion. Analysts’ expectations were of $6.26 billion. FY 25 Average selling price to be of approximately $483,000 and Homebuilding operating income as a percentage of revenues to be of approximately 8.9%.