Weak orders, rising cancellations at KB Home

KB Home, one of the nation’s largest home builders, reported revenues for its first fiscal quarter of $254.6 million, up 29% from $196.9 million for the first quarter of 2011, reflecting higher deliveries and an increase in the average selling price.

KB Home posted a $45.8 million loss for the quarter, which ended Feb. 29, 2012, compared with a $114.5 million loss in the first period a year ago.

Homes delivered increased 21% to 1,150, up from 949 homes delivered in the year-earlier quarter. Three of the company's four regions produced higher deliveries.

An increase in the cancellation rate to 36% from 29% in the year-earlier quarter led to a year-over-year decrease in net orders. These totaled 1,197 in the first quarter of 2012, down 8% from 1,302 net orders in the year-earlier quarter; a 22% increase in the company's central region was more than offset by decreases in each of the home builder’s three other regions.

The company had a backlog of 2,203 homes as of Feb. 29, 2012, compared with a backlog of 1,689 homes a year ago. Backlog homes and value at Feb. 29, 2012, each increased 30% year over year. Each of the company's four regions posted year-over-year increases in backlog value at the end of the 2012 first quarter.

The average selling price rose 6% to $219,000 from $205,700 for the year-earlier quarter, reflecting increases in the company's West Coast and southwest regions that were partly offset by decreases in its central and southeast regions.