KB Home (NYSE:KBH) reported stronger-than-expected results for its fourth quarter on Tuesday.
Revenues totaled $1.19 billion, down 23% from $1.56 billion, reflecting the negative impact the COVID-19 pandemic had on the Company’s operations, particularly its net orders and housing starts, in the second quarter.
Total pretax income decreased to $126.1 million from $165.0 million, reflecting the effects from pandemic-related disruptions on the Company’s operations earlier in the year. As a percentage of revenues, pretax income was even with the year-earlier quarter at 10.6%.
KB‘s income tax expense and effective tax rate were $20.0 million and approximately 16%, respectively. In the year-earlier quarter, income tax expense was $41.8 million and the effective tax rate was approximately 25%. The lower effective tax rate in the current quarter primarily reflected the favorable impacts of federal energy tax credits and excess tax benefits from stock-based compensation.
Net income and diluted earnings per share proved to be $106.1 million and $1.12, respectively, compared to net income of $123.2 million and diluted earnings per share of $1.31.
According to CEO Jeffrey Mezger, "We had a strong finish to this extraordinary year, particularly with the 42% year-over-year increase in our fourth quarter net orders.
"Housing market conditions continue to be robust, as the pandemic has helped propel demand for homeownership, accentuating all the financial, health, safety and emotional benefits it offers. This fundamental shift has long been anticipated — with pent-up demographic forces, a housing supply shortage, and favorable mortgage interest rates — and COVID-19 has accelerated these dynamics."
KBH shares dashed out of the starting blocks $2.65, or 7.8%, to $36.80.
