KB Home reported fiscal third quarter housing revenue fell 20% to $1.3 billion and deliveries dropped 19% to 2,732 homes, while backlog value rose for the first time in four years to $2.05 billion. Built to Order homes made up 74% of third quarter deliveries, up from 60% in the second quarter, and unsold inventory fell to 26% of production from 41% a year ago, with construction cycle time improving 19% to 99 days from 122 days. Diluted earnings per share fell to $1.05 from $1.61 a year ago, housing gross margin compressed to 16.5% from 18.2%, and homebuilding operating income was cut nearly in half to $67.1 million from $131.2 million. Chief Financial Officer Bill Hollinger said market conditions have evolved differently than expected since June, and the company cut its fourth quarter gross margin outlook by a full percentage point to a range of 16.0% to 16.6%, while average selling price guidance dropped roughly $20,000 to about $480,000. KB Home returned more than $65 million to shareholders in the quarter through buybacks and dividends, part of a five-year total north of $2.1 billion, and book value per share climbed above $62.
KB HomeQ3 housing revenue fell 20%, EPS dropped to $1.05 from $1.61, gross margin compressed to 16.5%, and Q4 margin guidance was cut.
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