KB Home (NYSE:KBH) reported upbeat earnings for its first quarter, while sales missed estimates. Deliveries totaled 2,152 homes, while average selling price decreased 5% to $370,900.
Total revenues decreased 7% to $811.5 million in the quarter, as deliveries totaled 2,152 homes.
Home building operating income totaled $31.3 million, compared to $44.0 million. Home building operating income margin was 3.9%, down 120 basis points. Excluding inventory-related charges of $3.6 million in the quarter and $5.0 million in the year-earlier quarter, this metric was 4.3%, compared to 5.6%.
Net income rose to $30.0 million and diluted earnings per share increased to $0.31, compared to a net loss of $71.3 million, or $.82 per diluted share, which included the above-mentioned charge, related to the Tax Cut and Jobs Act.
CEO Jeffrey Mezger said, "We made continued progress on our Returns-Focused Growth Plan in the first quarter, which contributed to our results, including the healthy year-over-year expansion of our gross margin.
"With the balanced allocation of our substantial operating cash flows since the start of our Plan in 2016, we have fueled significant growth in our business, measurably decreased our debt balance and reduced our shares outstanding. We have repaid over $800 million in debt, which is producing a tailwind to our gross margin, as we spread a lower level of interest across a larger active inventory balance."
Shares in KBH gathered nearly 24 cents, or nearly 1%, to $24.32
