KB Home's upcoming earnings

The top homebuilder's results will give investors a glimpse into the health of the housing sector.

By Wall St. Cheat Sheet Mar 21, 2012 12:59PM

Image: Home under construction (© Corbis)KB Home (KBH) will unveil its latest earnings on Friday. The company constructs and sells homes through its operating divisions across the United States. It also operates a homebuilding and financial services business serving home buyers in markets nationwide.

Here is a preview "cheat sheet" for KB Home's earnings: 

Wall Street earnings expectations: The average estimate of analysts is for a net loss of 23 cents per share, a narrower loss from the year-earlier quarter net loss of $1.49. During the past three months, the average estimate has moved down from a loss of 22 cents. Between one and three months ago, the average estimate moved up. It has dropped from a loss of 21 cents during the last month.

Past earnings performance: The company is looking to make a three-quarters streak of beating estimates. Last quarter, it beat expectations by reporting profit of 18 cents per share, and the previous quarter, it had a loss of 13 cents.

Wall Street revenue expectations: Analysts predict a rise of 71.5% in revenue from the year-earlier quarter to $337.7 million.

Analyst ratings: Analysts seem relatively indifferent about KB Home, with nine of 16 analysts surveyed maintaining a "hold" rating.

A look back: In the fourth quarter of the last fiscal year, profit fell 20.2% to $13.9 million (18 cents a share) from $17.4 million (23 cents a share) the year earlier, but exceeded analysts' expectations. Revenue rose 6.4% to $479.9 million from $451 million.

Key stats: A year-over-year revenue increase in the fourth quarter of the last fiscal year snapped a streak of three consecutive quarters of revenue declines. Revenue fell 26.7% in the third quarter of the last fiscal year, 27.4% in the second quarter of the last fiscal year and 25.4% in the first quarter of the last fiscal year.

KB Home reported a profit last quarter, snapping a three-month string of losses. The company reported a loss of $9.6 million in the third quarter of the last fiscal year, a loss of $68.5 million in the second of the last fiscal year and a loss of $114.5 million in the first quarter of the last fiscal year.

Stock price performance: Between Dec. 20, 2011, and March 19, 2012, the stock price rose $4.20 (54.6%), from $7.69 to $11.89. The stock saw one of its best stretches over the last year between Nov. 23, and Dec. 2, when shares rose for seven straight days, increasing 18.6% (+$1.24) over that span. It saw one of its worst periods between July 21 and Aug. 2, 2011 when shares fell for nine straight days, dropping 15.1% (-$1.40) over that span.

Competitors to watch: PulteGroup, Inc. (PHM), Lennar Corporation (LEN), D.R. Horton, Inc. (DHI), Toll Brothers, Inc. (TOL).

Derek Hoffman is an editor at Wall St. Cheat Sheet. As of this writing, he did not own a position in any of the aforementioned stocks.

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