KB Home (NYSE:KBH) stock fell 5.26% (As on March 25, 11:29:02 AM UTC-4, Source: Google Finance) after the company reported first quarter results that fell short of Wall Street expectations. The homebuilder’s housing gross profit margin compressed to 15.5%, excluding inventory-related charges, compared to 20.3% in the prior-year quarter, primarily reflecting price reductions, higher relative land costs, and reduced operating leverage. Homebuilding operating income margin fell to 3.1% from 9.2% YoY. The company delivered 2,370 homes at an average selling price of $452,100, down from $500,700 in the year-earlier period. Net orders increased 3% YoY to 2,846, while the average community count grew 7% to 274. Financial services pretax income totaled $5.5 million, compared to $7.5 million, mostly due to lower equity in income from the Company’s mortgage banking joint venture, partially offset by higher insurance commission revenues.  The mortgage banking joint venture’s results primarily reflected a lower volume of loan originations, largely resulting from fewer homes delivered. Ending backlog value was $1.70 billion, compared to $2.20 billion. Monthly net orders per community were 3.5, compared to 3.6. The cancellation rate as a percentage of gross orders was 12%, compared to 16%. The average community count for the quarter grew 7% to 274, and the ending community count was up 8% to 276.

KBH in the first quarter of FY 26 has reported the adjusted earnings per share of $0.52, missing the analysts’ estimates for the adjusted earnings per share of $0.55. The company had reported the adjusted revenue decline of 23 percent to $1.08 billion in the first quarter of FY 26, missing the analysts’ estimates for revenue of $1.09 billion. The Company had total liquidity of approximately $1.20 billion, including $200.5 million of cash and cash equivalents and nearly $1.00 billion of available capacity under its unsecured revolving credit facility (“Credit Facility”), with $200.0 million of cash borrowings outstanding. Investments in land and land development for the quarter decreased 38% to $567.2 million, compared to $920.3 million for the prior-year quarter, which included the purchase of two sizable parcels in our Southwest segment.

For the second quarter, KB Home expects housing revenues between $1.05 billion and $1.15 billion, with a midpoint of $1.10 billion. The company anticipates deliveries in the range of 2,250 to 2,450 homes and a housing gross profit margin between 15.0% and 15.6%. For the full year, the company projects deliveries of 10,000 to 11,500 homes and housing revenues between $4.80 billion and $5.50 billion.