KB Home’s (KBH) first-quarter revenue soared amid higher home prices, lifting the company to a profit and easily beating Wall Street expectations.
Home builders like Los Angeles-based KB Home have reported better results in recent quarters due in part to an uptick in prices. Meanwhile, buyers continue to be motivated by interest rates that remain at historically low levels.
KB Home said its profit for the first quarter checked in at $10.6 million, or 12 cents a share, compared to a year-ago loss of $12.5 million, or 16 cents a share. Revenue climbed 11% to $450.7 million.
Analysts projected earnings of eight cents a share and revenue of $435 million.
Shares leaped 7.6% to $19.02 late Wednesday morning. Through Tuesday’s close, KB Home was down 12.9% over the last 12 months.
Average selling prices increase in all of KB Home’s regions: the West Coast, Southwest, Central and Southeast. Overall, the average home price in the first quarter increase to $305,200 from $271,300.
The combined value of net orders jumped 18% year-over-year to $600.2 million, while net orders were up 5.6% at 1,765 homes.
However, deliveries fell 2.9% to 1,442, largely due to a 32% drop in the West Coast region following a lower backlog from previous quarter.
KB Home, the fifth-largest U.S. home builder, recorded a backlog of 2,880 homes as of Feb. 28, marking a 4.2% improvement versus the year-ago quarter.
Last month, luxury home builder Toll Brothers (TOL) said it delivered more homes at higher prices in its first quarter, reporting a sharp increase in earnings. Lennar (LEN) is scheduled to report earnings on Thursday.