Skid Row at KB Home: Fool by Numbers

On March 22, homebuilder KB Home (NYSE: KBH  ) released first-quarter results for the period ended Feb. 28. Here are the quick and dirty details for the quarter.

• Total sales plummeted 19.4%, as unit deliveries dropped 16% and average selling prices fell 5%. 
  
  
• Reported diluted earnings plunged into the basement, falling 83.1% as a difficult industry environment "continues to pressure the sales and profit margins of domestic homebuilders".
  
  
• The company is still seeing "instability" during the important spring selling season. It believes that tighter lending standards, combined with challenges in the subprime lending space, could make things worse in the industry before any improvements occur.
  
  
• KB Home carries a one-star rating in Motley Fool CAPS -- the lowest rank offered by our community intelligence database. So do rivals DR Horton (NYSE: DHI  ) , Lennar (NYSE: LEN  ) , Toll Brothers (NYSE: TOL  ) , and Pulte Homes (NYSE: PHM  ) . Conditions look pretty grim indeed in homebuilding; click here for other potential stocks to bet the house on.      

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	Q1 2007	Q1 2006	Change
Total Sales	$1,610	$1,767,234	$2,191,650	(19.4%)
Construction Revenue	--	$1,763,045	$2,187,324	(19.4%)
Financial Services Revenue	--	$4,189	$4,326	(3.2%)
Net Profit	--	$27,537	$173,334	(84.1%)
EPS	$0.25	$0.34	$2.01	(83.1%)
Diluted Shares	--	80,593	86,248	(6.6%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Construction	17.41%	26.01%	(8.60)
Total	2.38%	12.21%	(9.83)
Total	1.56%	7.91%	(6.35)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Construction Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$327,924	$71,224	360.4%
Accounts Rec.	$677,671	$568,663	19.2%
Inventory	$6,291,090	$6,953,844	(9.5%)

Construction Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$981,283	$945,232	3.8%
Mortgages and Notes Payable	$3,167,310	$3,116,618	1.6%

Learn the ways of the balance sheet.

Cash Flow Highlights
Fools will have to wait until KB Home files its 10-Q with the Securities and Exchange Commission. Find out why free cash flow is a Fool's best friend.

Related Foolishness:

• So Which Stocks Should I Buy Now?
• KB Home the Latest of a Lot
• The Homebuilder Blues

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.