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November 23, 2014

KB Home Breaks Rough Profit Cycle

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KB Home Breaks Rough Profit Cycle

KB Home, one of the nation’s largest builders, is ready for the spring-buying season. The company announced a surge in revenue, as its net orders rose 6 percent and the value of its orders soared 18 percent in the first fiscal quarter.

As the builder has increased prices across its sales area, the announcement also marks the first time since 2007 that KB Home has recorded a first-quarter profit. Its revenue increased 11 percent to $450.7 million.

“Our balanced approach to sales price and pace, combined with our focus on both top-line growth and profitability, will produce strong results in the coming quarters,” Chief Executive Jeffrey Mezger said in a statement.

KB Home increased its average sales prices across its sales regions, due to limited inventory and high demand. On the West Coast, average sales price for the first quarter was $525,000, rising 30 percent from a year earlier. In the Southwest, prices increased 26 percent to an average of $286,400; 16 percent in the Southeast to $256,300; and 13 percent in the central region to $210,400.

Source: “KB Home Delivers Hope for Housing Market’s Spring Selling Season,” The Wall Street Journal (March 19, 2014)

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