KB Home has reported its third-quarter results for 2024, with revenues increasing by 10% to $1.75 billion. The company's diluted earnings per share also saw a 13% increase to $2.04. In terms of stock repurchases, KB Home bought back $150.0 million of common stock over the quarter.
The company's homebuilding operating income grew by 5% to $189.0 million, with the homebuilding operating income margin at 10.8%. However, when excluding inventory-related charges, the homebuilding operating income margin was 10.9%, compared to 11.4% from the year-earlier quarter. The housing gross profit margin decreased to 20.6%, compared to 21.5%, again mainly due to product and geographic mix.
KB Home's financial services pretax income increased by 11% to $11.0 million, largely due to higher volume of loan originations and interest rate locks, with 88% of buyers financing their home purchases utilizing the company’s mortgage banking joint venture.
The company's net income rose by 5% to $157.3 million, and its diluted earnings per share grew by 13% to $2.04. The effective tax rate was 24.2%, compared to 22.9%.
For the nine months ended August 31, 2024, KB Home's revenues increased by 4% to $4.93 billion, with net income growing by 6% to $464.4 million. Diluted earnings per share also increased by 15% to $5.94.
Regarding backlog and net orders, the net orders for the quarter remained essentially the same at 3,085, with net order value increasing by 2% to $1.54 billion. The ending backlog homes totaled 5,724, compared to 7,008, with ending backlog value at $2.92 billion, compared to $3.40 billion. The company's ending community count grew by 10% to 254, and the average community count for the quarter increased by 5% to 251.
As of August 31, 2024, the company had total liquidity of $1.46 billion, including $374.9 million of cash and cash equivalents, and $1.08 billion of available capacity under its unsecured revolving credit facility, with no cash borrowings outstanding. The company's inventories grew by 10% to $5.65 billion.
KB Home repurchased 1,869,292 shares of its outstanding common stock at a cost of $150.0 million during the third quarter. The company had $800.0 million remaining under its current common stock repurchase authorization.
Looking ahead, KB Home provided guidance for its 2024 full year, including housing revenues in the range of $6.85 billion to $6.95 billion, an average selling price of approximately $490,000, and an effective tax rate of approximately 23%. The company also plans to provide guidance for its 2024 fourth quarter on its conference call.
Today the company's shares have moved -4.7% to a price of $83.3. If you want to know more, read the company's complete 8-K report here.
