Homebuilders: Look Out Below

KB Home released its Q3 earnings report yesterday.  This is what the stock market thought of KBH’s numbers (click on graph to enlarge):

The stock is down nearly 10% in two trading days despite the “bullish” new home sales report from the Census Bureau (more on that later).  KBH reported another decline in actual deliveries.  It also implemented some serious earnings “management” devices to make its net income appear larger than it really was.  I suspect that when they get around to releasing their 10-Q with a cash flow statement in it, we’ll see that it once again generated a cash flow loss from operations…
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