KB Home (NYSE: KBH) stock delivered a solid returns of over 12.3% on jan 11th, 2018 (as of 7:51PM EST; Source: Google finance) leading to the total returns of over 20.8% in this year to date.
The group is enhancing their revenues by 22% to $4.4 billion while operating margin expanded 140 basis points. Housing revenues enhanced 17% on a yoy basis during the fourth quarter of 2017 with 9% rise in homes delivered and an 8% increase in average selling price. For the full year housing revenues surged 21% yoy to $4.3 billion. For the 2018 first quarter, the group forecasts to generate housing revenues in the range of $840 million to $880 million. For the 2018 full year, they expect to produce housing revenues in the range of $4.5 billion to $4.9 billion.
KBH enhanced 9% yoy to backlog value of over $1.7 billion. In the fourth quarter of 2017, the group’s overall average selling price of homes delivered a rise of 8% to $416,500 boosted by the 10% rise in average selling price in their West Coast region. For the 2018 first quarter, they expect overall average selling price to be in the range of $387,000 to $392,000.
Homebuilding operating income enhanced to $131.9 million against $56 million for the year earlier quarter. The Southwest region produced a 21% rise in net order value on a 16% net order increase. Las Vegas continued to lead the region’s results having the highest net order rates per community company-wide. Southwest and West Coast business, enhanced their backlog value by 44% and 15%, respectively.
The group expects the housing market conditions to be positive 2018 which is the major target market. The 2017 fourth quarter housing gross profit margin enhanced 160 basis points on a year-over-year basis to 18.1%, while the overall gross margin for the quarter reached 18.6%, excluding the negative 50 basis point impact from the inventory-related charges.
KBH return on invested capital improved by 220 basis points to 7.4% while the return on equity enhanced 370 basis points to 10%. They forecast 2018 to be another solid year on the path towards delivering their original 3-year plan, 2019 targets.