KB Home(KBH) ZACKS·2024-06-14 13:20Core Viewpoint - KB Home is expected to report its second-quarter fiscal 2024 results on June 18, with earnings and revenues anticipated to decline compared to the previous year, influenced by challenging market conditions and a decrease in housing deliveries [1][2][3]. Revenue Performance - In the last reported quarter, KB Home's earnings and revenues exceeded the Zacks Consensus Estimate by 12.8% and 1.2%, respectively, with year-over-year increases of 6% in revenues and 21% in earnings [1]. - For the upcoming quarter, the consensus estimate for earnings has decreased to 1.94 per share. Revenue is projected at 1.6 billion to 1.75 billion a year ago, with an anticipated average selling price (ASP) of 479,500 [4]. Factors Affecting Performance - The decline in revenues is attributed to a decrease in housing deliveries, expected to fall by 7.9% year-over-year, influenced by consumer confidence, economic conditions, and interest rates [3]. - Despite these challenges, KB Home's strategies, such as reducing build time and increasing community count, may help mitigate some negative impacts [3]. Margins and Expenses - The housing gross margin for the second quarter of 2024 is projected to be between 20.5% and 21%, affected by concessions provided to homebuyers in the previous year due to market conditions [4]. - Selling, general, and administrative expenses as a percentage of housing revenues are expected to rise to 10.5%, up from 9.6% a year ago, with an effective tax rate of approximately 24% [5]. Orders and Backlogs - New orders are anticipated to increase to 4,164 units, up from 3,936 units in the previous year, driven by limited supply of pre-owned homes [5]. - The backlog is expected to be 6,583 units, a decrease from 7,286 units reported in the prior-year quarter [5]. Earnings Prediction - The model indicates a potential earnings beat for KB Home, supported by a positive Earnings ESP of +0.38% and a Zacks Rank of 2 [6][7].