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KB Home's Earnings Jump 21%

January 11, 2002|From Bloomberg News

KB Home, the third-largest U.S. home builder by units sold, said Thursday that its fiscal fourth-quarter earnings rose a better-than-expected 21% as low mortgage rates boosted sales.

Net income rose to $88.5 million, or $2.03 a share, for the three months ended Nov. 30, from $73.4 million, or $2, a year earlier, the company said. The per-share earnings reflect an increase in shares outstanding. Revenue rose 17% to $1.45 billion.

The 30-year mortgage rate averaged 1.13 percentage points lower in the three months than a year earlier, helping push U.S. new-home sales to a record in 2001, the National Assn. of Realtors reported. KB's profit report came one day after Lennar Corp., the second-biggest home builder, said its earnings rose 49% in the same period.

"Housing held up better than most would have expected in the aftermath of Sept. 11, and a big part of that was rates being so low it created a sense of urgency in buyers, a sense that this was a once-in-a-lifetime chance," said Christopher Winham, a home-building analyst with Goldman, Sachs & Co. who rates the stock "market perform."

Los Angeles-based KB Home, which changed its name from Kaufman & Broad Corp. last year, was expected to earn $1.82 a share, according to a survey of analysts by Thomson Financial/First Call.

KB Home shares fell 42 cents, or 1.08%, to close at $38.59 on the New York Stock Exchange. They are up 12% in the last 12 months.

KB's sales rose 10% in the quarter, to 7,814 homes, including 1,320 in France, where its Kaufman & Broad unit is one of the largest builders.

Earnings reported Thursday by other Southern California companies, excluding one-time gains or charges unless noted:

* ICN Pharmaceuticals Inc., which makes a widely used hepatitis C drug, said fourth-quarter earnings exceeded 29 cents a share. Analysts were expecting the Costa Mesa-based company to post earnings of 31 cents for the period, according to a survey by First Call.

ICN said its results have been aided by the use of its Rebetol hepatitis C drug with Schering-Plough Corp.'s new Peg-Intron treatment. Studies have shown that the combination works to stop the virus in more patients than an older combination treatment.

Earnings for 2002 "will likely exceed" $1.72 a share, ICN Chief Executive Milan Panic said. The average First Call estimate for 2002 is $1.74.

Shares of ICN were unchanged, closing at $32.96 on the NYSE.

* Printronix Inc., an Irvine manufacturer of computer printers, reported net income of $560,000, or 9 cents a share, for its fiscal third quarter ended Dec. 28. In the same period a year ago, the company lost $395,000, or 6 cents, including restructuring charges of $866,000. Revenue declined 16% to $34 million.

Shares of Printronix rose 13 cents to $9.04 on the NYSE.

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