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KB Home’s Profit Almost Doubles

From Associated Press

KB Home said Thursday its third-quarter profit nearly doubled, beating Wall Street estimates, on strong revenue growth and improved margins. The company also raised its earnings outlook for the year.

Net income grew to $227.5 million, or $2.55 a share, in the three months ended Aug. 31, from $117.9 million, or $1.42, a year earlier. Revenue rose 44% to $2.53 billion.

Analysts surveyed by Thomson Financial expected earnings per share of $2.40 on revenue of $2.48 billion.

The third quarter marked the 41st consecutive quarter the company has met or beaten analysts’ expectations, said Bruce Karatz, Los Angeles-based KB Home’s chief executive.

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“It was another terrific quarter contributing to a terrific nine months in every aspect, solidifying a very strong financial outlook for the year,” Karatz said. “We are very well positioned, both geographically and financially.”

KB Home raised its earnings outlook for the year to $9.30 a share from $9. Analysts estimate earnings per share of $9.14.

At a midday investor conference in New York, Karatz outlined a three-year growth plan that he said was not predicated on a growing housing market.

“We still have plenty of room to grow,” Karatz said.

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He said the company would seek to increase developments of low- and medium-density attached housing.

Net orders for new homes during the quarter were 10,467, a 17% increase over the same period last year, the company said.

KB Home’s order backlog at the close of the third quarter stood at 27,744 homes, valued at about $7.1 billion in revenue, Karatz said.

The company said new-order momentum was strong particularly in central areas of the country such as Texas, Chicago and Indianapolis.

Net housing unit deliveries in the third quarter rose 22% to 9,812, compared with 8,041 in the same quarter last year, the company said.

The company forecast a 25% increase in new-home deliveries for the fourth quarter.

Shares of KB Home rose $2.98 to $73.70.


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