KB Home Stock Falls Following Earnings But Says Demand Rising as Mortgage Rates Fall
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KB Home (KB) on Thursday reported a decline in sales and profits in its fiscal fourth quarter as high mortgage rates cut into demand while lower selling prices, along with added concessions to buyers, cut into profit margins. However, the company said it’s optimistic about a recovery in the new year.
KB Home posted net income of $150.3 million, or $1.85 per share, in the three months ended Nov. 30, a 31% decline from the same period in 2022. Revenue slid 14% to $1.67 billion, the company said in a press release.
Home deliveries dropped 10% to 3,407 in the latest quarter, while the average selling price went from $510,400 to $487,300 as the company had to lower prices to attract buyers.
CEO Jeffrey Mezger said KB Home is experiencing “a meaningful sequential increase in our net orders for the first five weeks of our 2024 first quarter, as consumers are responding favorably to the recent decline in mortgage rates.”
KB Home shares were down 0.9% at $61.75 at about 1:40 p.m. ET Thursday. Even with today’s losses, shares of KB Home have added 74% over the past year.
Netflix Shares Gain on Strong Ad-Tier Plan Take-up
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Netflix (NFLX) was the best-performing stock in the S&P 500 Thursday after an executive said the company’s ad-supported plan had attracted 23 million monthly users.
President of Advertising Amy Reinhard said during the Variety Entertainment Summit at the 2024 Consumer Electronics Show that the streaming service had increased its ad-tier user base by more than 50% since November when the company reported having 15 million monthly active users.
Netflix first introduced its ad-supported tier in November 2022, when it launched at a monthly price of $6.99. Since then, the company has cracked down on password sharing and eliminated its Basic ad-free plan, sending millions of old and new users to its cheapest offering.
The ad-supported plan’s subscription growth has repeatedly exceeded expectations, helping boost Netflix’s stock by more than 60% since the plan was introduced.
Netflix shares were up 2.8% at $491.75 late Thursday afternoon.
Midday Movers
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Netflix (NFLX) shares gained as the biggest streaming provider reported it has more than 23 million monthly active users (MAU) for its ad-supported plan. Shares of rivals Warner Bros. Discovery (WBD) and Paramount Global (PARA) dropped.
Chesapeake Energy (CHK) shares advanced with the firm set to become the biggest U.S. natural gas producer by purchasing rival Southwestern Energy (SWN) for $7.4 billion. Southwestern Energy shares were up slightly.
Tensions in the Middle East sent oil futures higher, lifting shares of Valero Energy (VLO) and other energy companies.
Tesla (TSLA) shares slid following a report it was increasing pay for production workers in the U.S. as union organizers target the electric vehicle maker.
Shares of Citigroup (C) sank as the bank warned of higher fourth-quarter charges than expected linked to its exposure to Argentina and Russia, as well as its restructuring.
Tesla Stock Falls After Reports Company Raising Pay Amid Mounting Union Pressure
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Tesla (TSLA) shares tumbled during intraday trading Thursday after reports that the electric vehicle pioneer would increase wages amid a wave of automaker pay raises following the United Auto Workers (UAW) union’s efforts to organize non-union employees.
Flyers posted at a California Tesla facility said that U.S. production workers were to receive a “market adjustment pay increase” in the new year, according to a report by Bloomberg on Thursday.
Following the UAW’s deals with the Big Three, the union launched a campaign to organize non-union workers at other automakers, including Tesla.
Since then, some automakers increased employees’ wages, which could stave off union organization action. Hyundai said that it would start raising pay for workers in 2024 so that hourly wages would increase by 25% by 2028. Volkswagen also offered an 11% raise to some of its production workers.
Tesla shares were down nearly 3% in early afternoon trading Thursday. The stock has gained 83% over the past year.
Hertz Stock Tumbles on EV Resales
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Shares of Hertz Global (HTZ) fell more than 3% in intraday trading Thursday after the car rental company said it would sell 20,000 electric vehicles from its fleet.
The company expects to recognize about $245 million in depreciation expenses in the fourth quarter. It will also use a portion of the proceeds to acquire new internal combustion engine vehicles. The company…
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