KB Home (KBH) recently announced its plans to boost its energy-efficient homes portfolio by introducing a new line of net-zero energy homes, namely ZeroHouse 2.0.
The new initiative taken by KB home seeks to cut down the monthly energy bills of homeowners, thereby reducing the overall cost of homeownership.
The program will also benefit the environment as these designs will run on solar power and other building techniques and boasts features that are far better than the company’s ENERGY STAR qualified standard.
Management believes that while a new ENERGY STAR qualified home can offer savings of $1,000 annually on energy utility costs as compared to a typical resale home, a ZeroHouse 2.0 home may completely eliminate monthly electricity charges.
Earlier, KB Home became the first national homebuilder to take part in the U.S. Environmental Protection Agency’s (EPA) WaterSense for New Homes water-efficiency program. Henceforth, the builder is committed to building homes that are designed to meet the EPA ENERGY STAR guidelines across all its communities opened in 2009 and beyond.
In the face of declining home sales, many of the homebuilders are seeking to provide additional features to add value to their homes, thereby making their new homes more attractive to buyers. Moreover, the prices are being kept at affordable levels in order to outpace the existing home sales in the country.
KB Home reported an adjusted loss of $15.8 million or 21 cents per share for its 2011 third quarter, compared with $2.0 million or 3 cents per share in the year-ago quarter.
Total revenue fell 27% to $367.3 million, mainly due to a 27% decline in housing revenues to $364.5 million. The decrease in housing revenues reflected a 31% drop in the number of homes delivered to 1,603 homes, partly offset by a 6% rise in average selling price to $227,400. Net orders, however, climbed 40% y/y to 1,838 homes while backlog increased 22% y/y at 2,657 homes as of August 31, 2011.
Even though the company is making efforts to improve and position itself for the future, a depressed housing industry is the biggest concern for any homebuilder, including KB Home. In addition, there is no sign of a speedy recovery. Home sales have declined consistently in each of the first three quarters. The situation is expected to deteriorate further.
Keeping these factors in mind, shares of KB Home are maintaining a Zacks #3 Rank, which translates into a short-term “Hold” rating.
KB HOME (KBH): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment