DOW JONES NEWSWIRES KB Home's (KBH) fourth-quarter profit slid 83%, though results were better than analysts had feared, as revenue fell by one-third and the company recorded a significantly lower tax benefit than a year earlier. Shares jumped 3.6% premarket to $14.85. KB has improved its results drastically in recent quarters, like many other builders that benefited from a government tax credit that caused new buyers to look for homes in droves before the credit expired this spring. Since the credit's expiration, builders have seen orders slump--with KB's orders declining 25% from a year earlier to 1,085 units. President and Chief Executive Jeffrey Mezger on Friday noted that the company has a cautious outlook as housing-market conditions remain difficult. "While there are indications that the overall economy has started to recover, the lack of improvement in employment and consumer confidence is likely to continue to hinder a sustained housing recovery," he said. For the quarter ended Nov. 30, KB reported a profit of $17.4 million, or 23 cents a share, down from $100.7 million, or $1.31 a share, a year earlier. The most-recent quarter included a tax benefit of $2 million and $3.2 million of inventory impairment and land-related charges, while the year-earlier quarter included a $191.7 million tax benefit and $77.2 million of inventory and joint-venture impairment and land-related charges. Revenue dropped 33% to $451 million, hurt by lower housing and land-sale revenue. Analysts polled by Thomson Reuters had most recently forecast a loss of 17 cents on $441 million in revenue. Adjusted housing gross margin, which excludes items such as inventory impairment, rose to 19.7% from 19%. At the quarter's end, backlog was 37% lower than a year earlier at 1,336 homes. Meanwhile, the average selling price rose 14% and the cancellation rate rose to 29% from 17% a year earlier. -By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com
