Shares of California-based homebuilder KB Home (NYSE: KBH) sold off Friday morning after the company failed to meet analyst estimates for its third quarter.
As we noted in our earnings preview, analysts were expecting to see the company show a loss of 56 cents per share for its third quarter, but the company failed to hit that number, posting an actual loss of a much worse 87 cents per share.
The good news is that the company's loss was much better than its third quarter last year, a quarter in which it posted a loss of $1.87 per share. This has done little to comfort investors though, who were selling Friday morning and pushed shares down 6.5% to $17.32, down $1.22. The stock hit a low in early trading of $16.98.
Total quarterly revenue was off by 33%, while net orders were up by a nice 62%. Sounds weird, but the drop in revenue despite rising net orders can be explained by lower home prices, which were off by 15% compared to the same period last year.
The company reported that it delivered 2,240 homes during the period, down from 2,788 during its third quarter last year. Its average price for homes sold in the quarter was $202,800, down from $239,700.
The company stated that the environment remains tough, but that it does see some "tentative indicators" that the market is leveling out and starting to recover.
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