(By Balaseshan) KB Home (NYSE:KBH) shares jumped in early trade on Friday after the U.S. homebuilder reported a narrower than expected loss for the second quarter due to an increase in the homes delivered and higher selling prices.
The homebuilder's results follow encouraging home sales data that indicate the U.S. housing market is showing signs of a long awaited recovery.
According to a recent report from the National Association of Realtors, the pending home sales index surged in May surged 5.9% to 101.1, the highest level in two years.
Another report, from the U.S. Commerce Department, earlier this week showed that new home sales rose to an annual rate of 369,000 last month from 343,000.
Loss for the second quarter narrowed to $24.14 million or $0.31 per share from $68.50 million or $0.89 per share.
Revenue grew 11% to $302.9 million, as three of its four homebuilding regions posted year-over-year growth. Analysts had expected a loss of $0.34 per share on revenue of $301.30 million.
Number of homes delivered rose 2% to 1,290 homes, with growth of 13% and 5% in Central and Southeast regions, respectively, partly offset by decreases in the West Coast and Southwest regions.
Average selling price grew 9% to $233,000, reflecting notable 33% growth in the West Coast region and 14% growth in the Southwest region, partially offset by decreases of 8% and 1% in the Central and Southeast regions, respectively.
Looking ahead into the second half of 2012, the company expects to achieve growth in its margins as its revenue and cost-management efforts take hold. The company anticipates to restore profitability as it has strong backlog of homes with higher selling prices and better margins.
KBH is trading up 5.17% at $9.15 on Friday. The stock has been trading between $5.02 and $13.12 for the past 52 weeks.