KB Home (KBH) will report second quarter results after the bell and host a call at 5:00 PM ET. KBH is the nation's seventh largest publicly-trade homebuilder by market capitalization and has a relatively large presence in California.
Second quarter earnings are expected to rise just over 50% year-over-year from $0.17 last year. The company guided for second quarter homebuilding revenue of $880-940 million with a gross margin +50 bps quarter-over-quarter to 15.6%.
Last quarter, KB Home reported strong results and management was very encouraged with the start of the Spring selling season. Deliveries rose 14%. More importantly, new orders rose 14% in units or 32% in dollar value.
Management raised FY17 homebuilding revenue guidance to $4.0-4.3 billion from $3.8-4.2 billion, ASP guidance to $385-395K from $370-385K and gross margin guidance to 16.1-16.5% from 16.0-16.5%.
The Spring selling season has continued to be strong this year. Last week, New Home sales for May came in higher than expected at a 610,000 seasonally adjusted annual rate.
KBH is up ~45% year-to-date vs. a ~22% increase for the ITB homebuilder ETF. Still, KBH trades at ~1.2x book value, below the ~1.4x average for the group.