(By Balachander) KB Home (NYSE:KBH) reported a profit for the third quarter, boosted by an income tax benefit related to the resolution of a federal income tax audit. The homebuilder's revenue grew in double digits, though slightly below market expectations.
Including an income tax benefit of $10.7 million, KBH earned $3.3 million or $0.04 per share for the quarter ended August, compared with a loss of $9.6 million or $0.13 per share in the year-ago quarter. Analysts' expected the company to lose 16 cents for the quarter.
Revenue rose 16 percent to $424.5 million, while Wall Street analysts projected a growth of 17.10 percent.
Housing gross margin improved 60 basis points to 17.5 percent.
"The favorable year-over-year performance in our deliveries; revenues; operating income; net orders; and backlog were particularly encouraging as we operated with fewer communities," commented CEO Jeffrey Mezger.
Mezger said the company's community count will bottom in the fourth quarter, though he expects KBH to reverse this trend in 2013. Community count fell 13 percent in the third quarter.
Net orders increased 3 percent to 1,900 and cancellation rate remained at 29 percent.
As of August 31, 2012, KBH had a backlog of 3,142 homes, representing potential future housing revenue of $744.7 million, the company said.
The stock, which has been trading between $5.02 and $13.65 over the past year, ended Thursday's regular trading session at $13.11.