KB Home to Report Q3 Earnings: Here's What Investors Must Know

Core Viewpoint - KB Home is expected to report its third-quarter fiscal 2025 results on September 24, with anticipated declines in earnings and revenues compared to the previous year [1][3]. Earnings and Revenue Estimates - The adjusted earnings per share (EPS) estimate for the third quarter is $1.50, reflecting a 26.5% decline from $2.04 in the same quarter last year [3][8]. - Total revenues are projected at $1.60 billion, indicating an 8.9% decrease from the prior year's $1.75 billion [3][8]. Revenue Trends - A decline in home deliveries and average selling price (ASP) is expected to contribute to the revenue drop, attributed to high mortgage rates and new tariff regime risks [4][5]. - Housing revenues are anticipated to range between $1.5 billion and $1.7 billion, with ASP projected between $470,000 and $480,000, down from $480,900 year-over-year [5][6]. Margin Expectations - The adjusted housing gross margin is expected to be between 18.1% and 18.7%, significantly lower than the 20.7% reported in the previous year [7][9]. - The homebuilding adjusted operating margin is projected to be between 7.6% and 8.2%, down from 10.9% year-over-year [9]. Orders and Backlogs - New orders are expected to rise by 6.5% to 3,286 units, while the backlog is projected to decrease to 4,653 units from 5,724 units in the prior year [11][8]. Earnings Prediction - The model indicates a potential earnings beat for KB Home, supported by a positive Earnings ESP of +1.40% and a Zacks Rank of 2 (Buy) [12][13].