KB Home Down

KB Home (KBH) shares were falling Tuesday after a tepid earnings report and mixed housing data.

The luxury home builder reported a loss of 71 cents a share in the recent quarter. That’s narrowed from 75 cents a share a year earlier, but far greater than the 42 cents a share loss analysts expected.

New home orders increased 5% to 1,913, vs. a year earlier, and cancellations fell by 6 percentage points to 22%. But revenue fell 14% to $264 million, less than the $277 million Wall Street expected, as economic conditions kept some buyers at bay despite government incentives.

“Encouraging data in recent months suggest that a number of housing markets may be stabilizing or starting to rebound, though we do not yet see, in many respects, a sustained nationwide recovery,” said Jeffrey Mezger, president and chief executive officer.

The National Association of Realtors, which said that existing home sales declined slightly in February, added that some home purchases were delayed merely due to weather. But it stopped short of saying conditions were otherwise normal.

“Although sales have been higher than year-ago levels for eight straight months and home prices are much more stable compared to the past few years, the housing recovery is fragile at the moment,” said Lawrence Yun, NAR chief economist.

The bottom line: “The key test for a durable recovery comes in the next few months as the tax credit deadline approaches,” Yun said. “If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure a broad home price stabilization.”

Carnival Up

Carnival (CCL) shares were rising Tuesday as profit fell but topped expectations and investors gave a warm reception to improved guidance.

The cruise liner said it earned 22 cents a share in the recent quarter – or 17 cents a share before a gain from an asset divestiture — down sharply from 33 cents a share in the year-ago period. But that easily topped the 13 cents a share analysts expected, as the company benefitted from “better-than-expected net revenue yields and lower-than-expected unit costs.”

Revenue increased to $3.1 billion, from $2.9 billion, in line with to just slightly below expectations for $3.14 billion.

In a note ahead of earnings that reiterated an outperform rating, William Blair analyst Sharon Zackfia wrote, “We continue to believe Carnival is executing well in an environment that remains difficult.”

The bottom line: Revenue yields and unit costs are expected to continue to rise and fall, respectively, by 2% to 3% for the full year. The company forecast earnings of $2.25 to $2.35 a share for 2010, up from previous guidance of $2.10 to $2.30 and offering upside to the $2.26 a share that analysts had pegged.

Similar Posts:

Share