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What:Shares of KB Home jumped as much as 10% early Friday, then settled to trade up around 8.6% as of 3 p.m. after the homebuilder announced better-than-expected fiscal-first-quarter 2015 results.
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So what:Quarterly revenue rose 29% to $580 million, including 19% growth in housing revenue to $524.8 million, and a more than five-fold increase in land sale revenue to $53 million. On the former, note KB Home delivered 1,593 homes during the quarter, good for a 10% increase over the year-ago period, while the overall average selling price of homes grew 8% to $329,500. For the latter, investors can primarily thank the sale of a large parcel of land in northern California.
That translated to net income of $7.8 million, or roughly $0.08 per diluted share, compared to $0.12 per diluted share in the fiscal first quarter of 2014. Analysts, on average, were only expecting earnings of $0.02 per share on sales of $474.3 million.
Now what:KB Homes also increased potential future housing revenues in backlog by 30% to $1.11 billion by the end of the quarter, while net order value increased 25% to $753.2 million.
"We are pleased with the robust growth in our first quarter net orders, net order value and backlog levels," said KB homes CEO Jeffrey Mezger, "which was fueled primarily by our expanded community count and healthy buyer demand."
To be sure, Mezger also noted KB Homes ended the quarter with 25% more active communities than it had one year ago, which bodes well for its positioning headed into the crucial spring selling season. All things considered, today's pop could be just the beginning for patient, long-term investors.
The article Why KB Home Stock Popped Friday originally appeared on Fool.com.
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