KB Home Orders Fall 8%, Shares Tumble

A surprise drop in home orders at KB Home KBH -4.40%sent shares of the nation's largest homebuilder sharply lower Friday, and raised concerns about the start of the critical spring selling season.

Net orders declined 8.1% to 1,197 homes, with a strong decline seen on the West Coast. The cancellation rate rose to 36% from 29% a year earlier, indicating more deals are unraveling before they hit the closing table.

Shares slumped 10% in early trading, as results sharply missed expectations. More recently, shares had recovered some, down 5% to $10.68.

Adam Rudiger, a home-building analyst with Wells Fargo WFC +0.46%& Co., was tough on the company in a client note. "This was a very poor quarter of KBH in our opinion, with almost all metrics missing both our estimates and consensus projections," he wrote.

Read Full Article from Wall Street Journal

- Posted: 2012-03-23 10:56:39

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