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KB Home and Lennar Report; Carnival and Carmax Cruising Along?

Dan Berman
Hot Stock Minute
KB Home and Lennar Report; Carnival and Carmax Cruising Along?

We start with a pair of homebuilders reporting earnings: Lennar (LEN) and KB Home (KBH). First is Lennar which beat estimates, declaring earnings of 54-cents a share when analysts expected 45-cents. Sales were also higher than expectations at $1.6-billion versus $1.56-billion. As for KB, it's expected to post earnings of 21-cents a share, way up from 4-cents a year ago. Revenue has likely climbed to $569-million dollars, up 1/3 from a year ago. Homebuilders as a group have been able to increase earnings amid tight supplies of existing homes and rising demand. However, they're feeling a pinch from rising interest rates. KB Home has been up about 5% year-to-date while Lennar is down 13% in the same time.

Cruise operator Carnival (CCL) is also reporting earnings today. The company is expected to have profits of $1.30 a share, down from $1.53 a year ago on revenue that's roughly the same: $4.65-billion versus $4.68-billion. The company is trying to put recent disasters and mishaps at sea behind it. Data on bookings makes it appear as though the negative publicity from the events has been fleeting. Carnival also has a new CEO steering all operations. At this point, Carnival stock has basically been flat in 2013, down less than 1%.

Carmax (KMX) is benefiting from the boom in car sales. Within the past hour the company came out with an earnings beat: 62-cents a share, a nickel better than expected. Revenue also topped estimates at $3.25-billion. The company says it moved 21% more vehicles in the last quarter than it did a year ago. Much of that was due to a loosening of credit. Prior to this report, shares of Carmax were already up a handsome 33% year-to-date.

Applied Materials (AMAT) is up more than 6% in the premarket. The chipmaker announced this morning that it's merging with Tokyo Electron to create a new $29-billion company. The new entity will have a dual listing here on the NASDAQ and the Tokyo exchange. Prior to the announcement, Applied Materials was already up 41% over the past year.