Homebuilder KB Home (NYSE: KBH) on Friday reported a narrower quarterly loss, sending the company’s shares sharply higher.
For the second quarter ended May 31, the Los Angeles-based company reported a net loss of $24.1 million, or $0.31 per share. This compares to a loss of $68.5 million, or $0.89 per share reported for the same period in the previous year.
Analysts surveyed by Bloomberg were on average expecting the homebuilder to report a loss of $0.35 per share.
KB Home, which caters to first-time buyers, posted an 11% increase in second quarter revenue to $302.9 million. The company’s home deliveries climbed 2% to $1,290 houses. Average selling price in the quarter rose 9% to $233,000.
KB Home’s results confirm the recovery in the housing market. Recent data suggests that the housing market has bottomed out. Falling inventory and record-low borrowing costs have also boosted new home sales. Earlier this week, Commerce Department had reported that new home sales rose to a two-tear high.
Commenting on the housing market, Jeffrey Mezger, CEO of KB Home, said that the overall housing market appears to have largely stabilized and is moving into a period of recovery and that dynamics have improved significantly over the past 90 days as compared to late last year, or early this year, with declining inventory level and heightened consumer demand.
Mezger said that KBH’s second-quarter results reflect the continued repositioning of the company’s operations and investments to stronger, highly desirable, land-constrained submarkets that support sales of larger, higher-priced homes to its core first-time and first move-up customers.
KB Home shares rose to an intra-day high of $10.07 in trading on Friday. The stock ended the day 12.64% higher at $9.80 on above average volume of 27.03 million. Year-to-date, the stock gained 45.83%, outperforming the S&P 500.