sees the housing market moderate, but still expects to achieve its turnover target this year.
Shares of the California-based builder rose after the company reported better-than-expected results on Wednesday. KB Home (ticker:
) reported diluted second-quarter earnings per share of $2.32 on revenue of $1.72 billion. Consensus expectations gathered by FactSet had expected earnings of $2.04 on revenue of approximately $1.65 billion. Earnings per share were 55% higher than in the same quarter last year, the company said.
In a press release, CEO Jeffrey Mezger said higher mortgage rates and inflation led to a moderation in sales. He noted that the company’s business model of building homes after they are ordered “will allow us to navigate these changing market conditions.” The CEO added that KB Home, as a built-to-order builder, offers buyers a wide range of floor plans at a range of price points. “Our approach resonates with buyers and is a major reason why we have had one of the highest absorption rates in the industry for many years,” he said.
Despite the slowdown in sales, the company said they are sticking to their previous guidelines. KB Home said it expects housing revenues between $7.3 billion and $7.50 billion for 2022 and an average sale price of about $500,000.
Shares of KB Home rose this week, rising a further 2.9% in after-hours trading on Wednesday, following a 2.4% gain in the regular session. Still, the stock still has a long way to go to regain lost ground. Shares are down about 41% this year.
Write to Shaina Mishkin at [email protected]