KB Home reports surprise profit as home sales climb

KB Home, the Los Angeles-based homebuilder that targets first-time buyers, reported an unexpected profit for its fiscal third quarter as sales and prices climbed.

Net income for the three months ended Aug. 31 was $3.3 million, or 4 cents a share, compared with a loss of $9.6 million, or 13 cents, a year earlier, the company said today in a statement. The average of 17 estimates in a Bloomberg survey was for a loss of 15 cents a share.

Record-low mortgage rates and a limited supply of new homes are boosting orders for U.S. builders. Confidence among homebuilders climbed to the highest level in more than six years, the National Association of Home Builders/Wells Fargo sentiment index showed this week. Single-family housing starts rose in August to the fastest annual rate since April 2010, the Commerce Department said Sept. 19.

“It is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise,” KB Home Chairman and Chief Executive Officer Jeffrey Mezger said in the statement.

KB Home’s revenue increased 16 percent from a year earlier to $424.5 million. Orders rose 3 percent to 1,900 homes.

The average selling price was $245,100, up 8 percent from a year earlier and 5 percent from the second quarter.