Investing.com – KB Home soared Thursday, triggering a wave of buying across homebuilders after the company topped quarterly results on the top and bottom lines.
KB Home (NYSE:) reported fiscal second-quarter earnings of $0.51 a share on revenue of $1.02 billion, compiled by Investing.com for earnings of $0.39 and $943 million, respectively, sending its share price more than 6%.
The upbeat results were driven by a strong spring selling season, with net orders rising 15% year on year to 4,064.
“We are pleased with our second-quarter performance, as we made significant progress on our Returns-Focused Growth Plan. Two of the key objectives of this plan are to grow our business and strengthen our balance sheet,” CEO Jeffrey Mezger said. “This quarter’s results demonstrate further achievement in both areas, with average community count growth of 17% year over year – our most substantial increase in four years – and a 930-basis-point reduction in our debt to capital ratio, to 45.8% over the same period.”
KB Home forecast third-quarter housing revenue of $1.1 billion to $1.18 billion, which Wedbush said was below analysts’ mean estimate at the time of $1.22 billion.
But that did little to dent optimism as the Wedbush lifted its price target on the homebuilder to $25 from $22, insisting “the good news of KBH’s community count growth in F2Q19 outweighs the bad news of FY19 revenue guidance below our old estimate.”
The better-than-expected quarter from KB Home lifted optimism in the sector, with DR Horton (NYSE:), Toll Brothers (NYSE:) and PulteGroup (NYSE:) on track to end the day higher.
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