Photo: Wikimedia Commons
Whoops. Maybe the housing rebound isn’t back on at all.One of the best sectors since the market bottom last fall has been the homebuilders, but maybe investors got ahead of themselves.
Shares of KB Homes are off 12 per cent today after the company’s earnings report.
Revenue for the quarter was up 29 per cent to $256 million, but analysts were looking for $337 million.
The loss for the quarter was 59 cents per share, but analysts only thought the loss would be 24 cents.
The commentary from management is decidedly mixed:
“While we are encouraged by the recent positive economic and housing market trends, our operational and financial results for the first quarter were mixed,” continued Mezger. “We ended the quarter with a higher backlog compared to a year ago, although our orders moderated. At the same time, we posted growth in our deliveries and revenues and reduced our net loss significantly from the prior year. The strategic actions we implemented toward the end of last year, and plan to continue to emphasise this year, should have a more pronounced impact as the year unfolds. We believe these steps, along with the benefits of working with our new preferred mortgage lender, Nationstar Mortgage, in the coming quarters will generate further momentum in our business and, when combined with a stronger housing environment, should enable us to achieve profitability later this year.”
So basically: things have improved, but there’s a long way to go.
BTW: Here’s a chart of the homebuilder index, in case you haven’t seen the run these stocks have been on.