KB Home to Sell Some Land Parcels Previously Set for Building
October 19 2016 - 8:00AM
Dow Jones News
KB Home plans to sell 20 land parcels, over 2,000 lots, that no
longer fit into its business strategy, the home builder told
investors this week.
At an investor conference in Los Angeles on Tuesday, KB Home
said it decided to sell the land parcels—the majority of which are
in the company's Southeast region—rather than build and sell homes
on the parcels as previously intended. The company estimated it
would take an inventory-related charge of about $30 million to $40
million in the fourth quarter.
The parcels include land in excess of near-term requirements,
land where the company now believes investment in development is
not justified, land located in areas outside of the company's
served markets and land entitled for certain product types that
differ from KB Home's primary offerings.
For KB Home's fourth quarter, which ends in November, the
company backed its previously disclosed financial targets and said
net orders for the first six weeks of the period increased 14% year
over year.
KB Home in September reported better-than-expected profit in its
third quarter as housing revenues rose 14%.
Shares, which have climbed 29% so far this year, were unchanged
in premarket trading from $15.93 at Tuesday's close.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
October 19, 2016 07:45 ET (11:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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