KB Home (NYSE:KBH) stock fell 3.94% (As on Mar 24, 11:20:52 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY 22. Homes delivered were essentially even at 2,868. The average selling price rose 22% to $486,100. Homebuilding operating income grew 49% to $169.6 million. The homebuilding operating income margin increased 220 basis points to 12.2%, reflecting improvements in both housing gross profit margin and selling, general and administrative expense ratio. The housing gross profit margin increased 160 basis points to 22.4%. The adjusted housing gross profit margin, which excludes inventory-related charges of $.2 million in the current quarter and $4.1 million in the year-earlier quarter, expanded 130 basis points from 21.1%. The higher housing gross profit margin mainly reflected a favorable pricing environment due to strong demand and the limited supply of homes available for sale, and lower relative amortization of previously capitalized interest. These positive impacts were partly offset by higher construction costs, particularly elevated lumber prices, and increased expenses to support current operations and expected growth.

Moreover, the ending backlog value grew 55% to $5.71 billion, the Company’s highest first-quarter level since 2007, with each of the Company’s four regions generating increases ranging from 38% in the West Coast to 114% in the Southeast. Ending backlog grew 29% to 11,886 homes. Net order value expanded by $284.7 million, or 15%, to $2.15 billion. Average monthly net orders per community increased to 6.6, compared to 6.4. Reflecting the Company’s lower average community count, which decreased 4% to 213, net orders were down slightly to 4,210. The Company’s ending community count was essentially flat at 208. The cancellation rate as a percentage of gross orders was nearly even at 11%.

KBH in the first quarter of FY 22 has reported the adjusted earnings per share of $1.47, missing the analysts’ estimates for the adjusted earnings per share of $1.54. The company had reported the adjusted revenue growth of 23 percent to $1.4 billion in the first quarter of FY 22, missing the analysts’ estimates for revenue of $1.5 billion.

Additionally, the Company had total liquidity of $1.07 billion, with $240.7 million of cash and cash equivalents and $831.4 million of available capacity under its unsecured revolving credit facility. During the quarter, the Company completed an amendment to its unsecured revolving credit facility, increasing its borrowing capacity to $1.09 billion from $800.0 million and extending its maturity to February 18, 2027.