KB Home shares declined in the extended session Wednesday even after the home builder reported results that topped Wall Street estimates, hiked its revenue forecast for the year and reported steady demand amid rising mortgage rates.
shares slid more than 2% after hours, following a 0.7% decline in the regular session to close at $48.06.
The company reported fiscal third-quarter net income of $149.9 million, or $1.80 a share, compared with $255.3 million, or $2.86 a share, in the year-ago period. Revenue declined to $1.59 billion from $1.84 billion in the year-ago quarter.
Meanwhile, analysts surveyed by FactSet had forecast earnings of $1.43 a share on revenue of $1.47 billion.
KB Home also forecast full-year revenue of about $6.31 billion. A quarter ago, KB Home had estimated revenue between $5.8 billion and $6.2 billion. Analysts forecast, on average, $6.17 billion in annual revenue from KB Home.
“While our year-over-year comparisons reflect the record results we achieved in the prior-year quarter, we expect this quarter’s solid performance to contribute to a more profitable 2023 fiscal year than we had previously anticipated,” said Jeffrey Mezger, KB Home’s chairman and chief executive, in a statement, adding that demand for houses held steady over the quarter, even as mortgage interest rates kept rising.
On Wednesday, the Federal Reserve forecast a “soft landing” for the economy and left rates unchanged.
“With the choice, flexibility and affordability that our Built to Order model offers to our buyers, we believe we are well positioned to navigate the potential for shifting housing market conditions,” Mezger said.
Year to date, shares of KB Home closed Wednesday up 50.9%, while the S&P 500 index
has gained 14.7% over 2023.