雅虎香港財經 KB Home orders plunge amid 'challenging' environment
Homebuilder KB Home (KBH) reported revenue and profits that missed estimates in the fourth quarter as its net orders plunged and the value of its backlog fell 25% against the same quarter last year.
The Los Angeles-based homebuilder posted quarterly results that missed Wall Street expectations, with earnings per share coming at $2.47 against $2.86 expected by Bloomberg consensus.
Revenue in the quarter totaled $1.94 billion in Q4, less than the $1.98 billion expected by analysts compiled by Bloomberg.
The company reported a backlog of over 7,600 homes valued about $3.7 billion, a 27% drop in units and a 25% drop in value compared to the same quarter last year.
In the fourth quarter, the company's net orders totaled 692 home, down 80% from 3,529 in the same quarter last year. Gross orders for the company fell 47% during the quarter, and cancellation rates as a percentage of gross orders totaled 68% compared to 13% a year ago.
"While our backlog has become overextended relative to historical levels due to longer build times, we are committed to reducing our cycle times to achieve deliveries within a more traditional time frame of between 6 and 7 months from sales to close," Jeffrey Mezger, Chief Executive Officer of KB Home said on the earnings call Wednesday. KB delivered 3,786 homes in the quarter, up 3% from last year, with an average selling price of $510,400, up 13%.
KB Home shares fell as much as 5% in extended trading on Wednesday following the company's quarterly results.
"While favorable demographics and a prolonged undersupply of homes give us confidence in the housing market's long-term outlook, current conditions remain challenging," Mezger said in the company's earnings release. "High mortgage rates and persistent inflation, together with an uncertain economy, have made homebuyers more cautious since the middle of last year."
Housing has been under pressure amid the Fed's aggressive tightening campaign to tame sky-high inflation. The hikes led to an increased cost of borrowing that reflected in higher mortgage rates, sidelining more first-time home buyers.
KB Home told analysts on its earnings call the company will use two different sales strategies, depending on how many homes are backlogged for each community.
“For communities that have large backlogs, particularly those with far more in backlog than remaining to sell, we're placing more emphasis on our temporary interest rate buy-down and lock programs to help produce sales and deemphasizing price reductions until more of our backlog is delivered,” Robert McGibney, the company's COO said on the earnings call.
In the first quarter, the company expects housing revenue to fall in a range between $1.25 billion and $1.40 billion, with average selling prices falling between $490,000 and $500,000. Profit margins are expected to fall between 20% and 21% in the first quarter. The company gave no color on what expectations are for gross margins in 2023.
“There's just a fair amount of uncertainty out there right now, which is why we didn't guide beyond the first quarter,” Jeff Kaminski, KB Home CFO, said on the call. “A lot of the remainder of the year will just depend on what the spring selling season holds, both in terms of new sales and what it takes to close out our current backlog.”
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
