On March 22, homebuilder KB Home
- 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 Gross Margin |
17.41% |
26.01% |
(8.60) |
|
Total Pre-tax Margin |
2.38% |
12.21% |
(9.83) |
|
Total Net Margin |
1.56% |
7.91% |
(6.35) |
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:
Do you think you could pitch your favorite stock or ditch your least favorite one in less than 27 seconds? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos.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.
