Volatile stock to watch: KB Home (NYSE: KBH)

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KB Home (NYSE: KBH) stock slightly fell over 0.7% on September 29th, 2019 (as of 12:57 pm GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19. The company’s net orders during the third quarter grew 24% to 3,325, and the net order value grew 25% to $1.28 billion. Both net orders and net order value grew in each of the company’s four regions. The  net orders per community averaged 4.3 per month, compared to 4.1 per month. The cancellation rate as a percentage of gross orders for the 2019 third quarter reduced to 20% from 26%. The Company’s ending backlog grew 14% to 6,230 homes. Ending backlog value grew to $2.30 billion, which is a 13% increase from $2.04 billion, with increases in all regions. Average community count for the third quarter grew 18% to 255, while ending community count grew 13% to 254. The improvement in average community count showed the growth in each of the company’s four regions. The company has reported the Net income totaled $68.1 million, or $.73 per diluted share, compared to $87.5 million, or $.87 per diluted share.

Further, at the end of third quarter, KBH had total liquidity of $610.8 million, that includes the cash and cash equivalents of $183.8 million and had the available capacity under its unsecured revolving credit facility of $427.0 million, and $50 million of cash borrowings outstanding. Stockholders’ equity rose to $2.26 billion from $2.09 billion and the company’s book value per share grew by $1.58 to $25.59.

KBH in the third quarter of FY 19 has reported the adjusted earnings per share of 73 cents, beating the analysts’ estimates for the adjusted earnings per share of 65 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $1.16 billion in the third quarter of FY 19, missing the analysts’ estimates for revenue of $1.17 billion.

Moreover, during the third quarter, Homes delivered had grown slightly to 3,022. The average selling price declined 7% to $381,400, mainly due to a community mix shift within the Company’s West Coast region. However, the Homebuilding operating income fell to $85.5 million, compared to $105.6 million. Homebuilding operating income margin was 7.4%, also down by 120 basis points.

Additionally, KBH during the quarter has approved an increase in the Company’s quarterly cash dividend on its common stock, which has more than tripled to $.09 per share.

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