LOS ANGELES (AP) -- KB Home's second-quarter loss narrowed in part because of a larger tax benefit as the homebuilder reported an increase in deliveries and net orders. Its performance beat Wall Street's expectations and its shares climbed in morning trading.
Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy.
The Los Angeles company, which builds homes to order, reported on Friday that it lost $24.1 million, or 31 cents per share, for the three months ended May 31. That compares with a loss of $68.5 million, or 89 cents per share, a year earlier.
Analysts forecast a bigger loss of 35 cents per share, according to a Factset survey.
Shares of KB Home added 43 cents, or 4.9 percent, to $9.13 in morning trading. Over the last year, the stock has traded in a range of $5.02 to $13.12.
KB Home's tax benefit was $4.5 million in the current quarter compared with a $300,000 tax benefit in the prior-year period.
Revenue increased 12 percent to $302.9 million from $271.7 million, topping Wall Street's $294.8 million.
KB Home's deliveries rose 2 percent to 1,290 homes, with the biggest gains coming in the Central and Southeast regions. The average selling price climbed 9 percent to $233,000 from $213,400. This was the eighth straight quarter that the company posted an increase in the average selling price from the year-ago period.
Net orders increased 3 percent to 2,049 from 1,998 homes thanks to increases in the Central region and on the West coast.
Backlog, which represents potential future revenue, increased to 2,962 homes from 2,422 homes.
The cancellation rate as a percentage of gross orders edged slightly higher to 26 percent from 25 percent. The cancellation rate as a percentage of beginning backlog declined to 32 percent from 39 percent.
On Wednesday Lennar Corp. reported that its second-quarter net income surged on a tax adjustments. The company, which sells homes for entry level and move-up buyers as well as retirees, also reported an increase in deliveries and new orders.
- KB Home