Big Las Vegas builder reports higher fourth-quarter earnings

Friday, Dec. 19, 2003 | 11:07 a.m.

SUN STAFF AND WIRE REPORTS

LOS ANGELES -- KB Home, the sixth-largest U.S. home builder by stock market value and the largest in Las Vegas, Thursday said fiscal fourth-quarter profit increased 12 percent as low mortgage rates spurred sales.

Net income for the three months ended Nov. 30 rose to $138.7 million, or $3.31 a share, from $123.7 million, or $2.92, in the year-earlier period. Revenue rose 11 percent to $1.87 billion, the Los Angeles-based company said in a statement.

U.S. home builders have profited this year as lower borrowing costs enticed more people to buy houses. The average U.S. rate for a 30-year fixed mortgage is 5.82 percent this week, compared with 6.03 percent in the year-ago week, according to Freddie Mac. In June, the rate fell to a 45-year low of 5.21 percent, the McLean, Virginia-based mortgage financier has said.

Analysts expected KB Home to earn $3.08 a share, based on the average estimate in a Thomson Financial survey.

The company's shares rose $1.18, or 1.8 percent, to $67.18 as of 4 p.m. in composite trading on the New York Stock Exchange. They have jumped 57 percent this year, more than the 24 percent increase in the Standard & Poor's 500 Index.

"The company's outlook is positive as strategic investments in both new and existing markets, including recent acquisitions in the Southeast region, the acquisition of Zale in Chicago and recently established start-up operations in Fort Myers and Treasure Coast, Fla., have extended the platform for KB Home's continued growth," Chief Executive Bruce Karatz said in a statement. "The persistent housing supply-demand imbalance along with strong demographic trends and the potential for economic recovery and improved consumer confidence further reinforce the company's favorable point of view."

Lennar Corp. is the biggest U.S. home builder by stock market value, followed by Centex Corp., D.R. Horton Inc., Pulte Homes Inc. and NVR Inc.

In Las Vegas, KB is the largest home builder in Southern Nevada with 2,959 escrow closings in 2002, according to Home Builders Research Inc.