KB Home Trades Higher Following Q1 Earnings Beat

KB Home KBH shares traded higher Tuesday afternoon following its first-quarter earnings release.

The homebuilder reported earnings of 31 cents per share, beating estimates by 5 cents. Sales came in at $811.483 million, missing estimates by $19.757 million.

"We made continued progress on our Returns-Focused Growth Plan in the first quarter, which contributed to our results, including the healthy year-over-year expansion of our gross margin," said Chairman and CEO Jeffrey Mezger. "With the balanced allocation of our substantial operating cash flows since the start of our Plan in 2016, we have fueled significant growth in our business, measurably decreased our debt balance and reduced our shares outstanding. We have repaid over $800 million in debt, which is producing a tailwind to our gross margin, as we spread a lower level of interest across a larger active inventory balance."

Mezger's statement continued, "This increase, together with a substantial number of planned openings still to come, positions us to capitalize on demand during the spring selling season. Although the decline in net orders during the 2018 fourth quarter impacted our first-quarter housing revenues, we are encouraged by improving market conditions, which we believe should enable us to generate stronger revenues in the 2019 second half."

Highlights

• Total revenues decreased 7 percent
• Deliveries totaled 2,152 homes
• Average selling price decreased 5 percent to $370,900

KB Home shares are up 2.1 percent at $24.60 in after-hours trading.

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