KB Home Q2 2022 Earnings Report
Key Takeaways
KB Home's Q2 2022 results showed significant year-over-year growth in revenues, operating income, and diluted earnings per share. Revenues increased by 19% to $1.72 billion, and diluted earnings per share grew by 55% to $2.32. The company reaffirmed its fiscal 2022 guidance, supported by an ending backlog of over $6 billion.
Revenues grew 19% to $1.72 billion.
Diluted earnings per share increased 55% to $2.32.
Homebuilding operating income grew 62% to $264.5 million with a margin of 15.4%.
Ending backlog value increased 43% to $6.12 billion.
KB Home
KB Home
KB Home Revenue by Geographic Location
Forward Guidance
KB Home provided guidance for the full fiscal year 2022, including housing revenues between $7.30 billion and $7.50 billion, an average selling price of approximately $500,000, and a homebuilding operating income percentage between 16.0% and 16.6%.
Positive Outlook
- Housing revenues in the range of $7.30 billion to $7.50 billion.
- Average selling price will be approximately $500,000.
- Homebuilding operating income as a percentage of revenues in the range of 16.0% to 16.6%.
- Housing gross profit margin in the range of 25.6% to 26.2%.
- Ending community count of approximately 250.
Challenges Ahead
- Effective tax rate of approximately 25%, assuming no federal energy tax credit extension is enacted.
- Sales rates are moderating from the exceptional levels the industry has experienced, as buyers process the impact of higher mortgage interest rates, as well as inflationary pressures.
- Cancellation rate as a percentage of gross orders was 17%, compared to 9%.
- Construction costs are higher, including elevated lumber prices.
- Increased expenses to support current operations and expected growth.
Revenue & Expenses
Visualization of income flow from segment revenue to net income