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KB Home reports Q4 EPS $2.47, consensus $2.87
The Fly

KB Home reports Q4 EPS $2.47, consensus $2.87

Reports Q4 revenue $1.94B, consensus $1.98B. CEO Jeffrey Mezger: "Our financial results for 2022 mark one of the best years in our Company’s history. Our top-line growth of more than 20% and operating margin expansion to over 15% drove diluted earnings per share above $9, a greater than 50% increase year over year. As a result, we produced a year-end book value of $43.59 per share, a 27% improvement. While favorable demographics and a prolonged undersupply of homes give us confidence in the housing market’s long-term outlook, current conditions remain challenging. High mortgage rates and persistent inflation, together with an uncertain economy, have made homebuyers more cautious since the middle of last year. As such, in the fourth quarter, we prioritized delivering our large backlog and protecting our high margins over taking steps to stimulate additional sales during this seasonally slower time frame. This emphasis on deliveries continues as we enter the new year, with a still large backlog of over 7,600 homes, representing approximately $3.69 billion of future revenues, that supports our top-line projection for 2023. Depending on market dynamics and backlog levels in each community, we are getting more aggressive with our pricing ahead of the Spring selling season, in order to generate new orders. At the same time, with the industry-wide deceleration in housing starts compared to a year ago, we are also pursuing reductions in direct construction costs and build times, which should help to offset the impact of pricing adjustments we may take. We believe we are well positioned to navigate the current environment, with a solid balance sheet and anticipated healthy cash flow for 2023. We are committed to continuing to moderate our land investments until market conditions improve, as well as to maintain a balanced approach to capital allocation, to maximize long-term shareholder value."

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