KBH HOME POSTS RECORD NET INCOME DEVELOPER BUILDS ON SUCCESS.

Byline: Gregory J. Wilcox Staff Writer

Housing development giant KBH Home Corp. on Wednesday reported record net income for the first quarter of 70 cents per share, a gain of 25 percent from year-ago levels and well above Wall Street estimates.

The Los Angeles-based company, formerly known as Kaufman and Broad Home Corp., also raised earnings estimates for the second quarter and full year.

For the quarter ended Feb. 28, the company said it earned $25.8 million on record revenues of $821.1 million. This compares with net income of $64.2 million, or $1.47 a share, on sales of $799.6 in the year-ago period.

However, the 2000 first quarter included a one-time gain of $39.6 million, or 91 cents a share, related to the initial public offering of KBH's French subsidiary. Absent this gain, per-share earnings for the period were 56 cents.

Current first quarter per-share earnings beat analysts' estimates by 4 cents.

And the picture looks good going forward despite the malaise afflicting the economy.

Bruce Karatz, company chairman and chief executive officer, said the first-quarter numbers present two conclusions.

``First, our record backlog ... is a tremendous underpinning for our projections of another record year in 2001. Second, these results paint a favorable picture of our markets through the West Coast, Southwest and Central regions,'' he said.

As for beating analysts' expectations, well, that's expected. It's something KBH has done for 23 consecutive months.

KBH is among only 5 percent of the companies on the S&P 500 that has this kind of track record on exceeding Wall Street estimates, said company spokeswoman Mary McCarthy.

The company looks for that record to remain intact. It has boosted its full-year earnings forecast to $4.75 to $4.85 vs. the consensus by first Call/Thompson Financial of $4.76.

KBH also expects second-quarter earnings of 95 cents vs. the street's 90 cents.

Analysts note that the first-quarter figures are a lagging indicator, reflecting a snapshot of the economy six to eight months ago when experts were wringing their hands over how to slow it a little.

Nevertheless, this sector seems to be holding up rather well.

Ian Jacobs at Goldman Sachs & Co. said the company's current numbers are as strong and maybe stronger than those in the recent past.

``Historically, home building sales have kind of led economic recoveries or contractions and clearly that isn't the case today. It is the one beacon of light in an otherwise very dismal economic scene,'' he said.

KBH has a backlog of 12,564 units, up 30 percent over last year.

``It's hard to imagine the economy could slow down without taking the housing sector with it but it seems like orders are holding up pretty well across the industry,'' said analyst David D. Weaver at Legg Mason.