KB Home to Sell Some Land Parcels Previously Set for Building

KB Home plans to sell 20 land parcels, over 2,000 lots, that no longer fit into its business strategy, the home builder told investors this week.

At an investor conference in Los Angeles on Tuesday, KB Home said it decided to sell the land parcels—the majority of which are in the company's Southeast region—rather than build and sell homes on the parcels as previously intended. The company estimated it would take an inventory-related charge of about $30 million to $40 million in the fourth quarter.

The parcels include land in excess of near-term requirements, land where the company now believes investment in development is not justified, land located in areas outside of the company's served markets and land entitled for certain product types that differ from KB Home's primary offerings.

For KB Home's fourth quarter, which ends in November, the company backed its previously disclosed financial targets and said net orders for the first six weeks of the period increased 14% year over year.

KB Home in September reported better-than-expected profit in its third quarter as housing revenues rose 14%.

Shares, which have climbed 29% so far this year, were unchanged in premarket trading from $15.93 at Tuesday's close.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 07:45 ET (11:45 GMT)

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