Kaufman & Broad’s Profit Soars

Kaufman & Broad Home Corp., the largest U.S. home builder, on Wednesday said fiscal fourth-quarter earnings rose a better-than-expected 50% as a booming housing market helped boost deliveries.

The Los Angeles-based company’s net income for the three months ended Nov. 30 rose to $41.8 million, or $1.02 a share, from $27.9 million, or 69 cents, in the year-earlier period. That beat the 87-cent average forecast of analysts polled by First Call Corp.

Kaufman & Broad attributed the better-than-expected earnings to a 30% increase in home deliveries to 5,008 and a 1.3% increase in its gross margin.

“When you combine strong volume increases with improved margins, the impact on the bottom line is very powerful,” said Michael Henn, the company’s chief financial officer.

Kaufman & Broad rose 63 cents to close at $29.50 on the New York Stock Exchange.

Kaufman & Broad said revenue in the quarter rose 28% to $826.6 million from $647.3 million. The company operates in 20 markets, including California, Nevada, Arizona, Texas and Utah.

Net orders for the quarter rose 43% to 4,321 homes. The company’s backlog of homes ordered but not yet completed rose 65% to 6,943 units from 4,214 at the end of November 1997.

Kaufman & Broad this month completed its $593-million purchase of Lewis Homes, the biggest privately held U.S. home builder.