Homebuilder KB Home misses earnings, cites supply chain issues

Yahoo Finance Live's Julie Hyman and Brian Sozzi discuss earnings for KB Home amid supply chain issues.

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BRIAN SOZZI: Interesting quarter out of KB Home. The stock is getting hit slightly, but still, impressive numbers here by this company. Average selling prices of 22% in the most recent quarter, backlog up 55%. Just underscores really strong or continued strong demand in the housing market. But it was really, Julie, the earnings call last night from KB Home that caught my attention, noting a lot of out of stocks in large part because of supply chain challenges.

Seeing they can't get enough of a product called flex duct-- I guess that is stuff that goes inside your ceiling to keep the air flowing in your house. I'm clearly not out there building or buying a house right now, calling it stuff. But also saying shortages in appliances, garage doors, windows, cabinets, HVAC equipment, and other products as well. They just can't get this stuff, hence they just can't finish building homes.

JULIE HYMAN: Well, and, you know, we talked about the average selling price going up, but the company is making less on those houses than it did a year ago. Adjusted housing gross margin, 22.4% versus 24% a year earlier. So it's getting tougher between those supply chain shortages. And also we know what's been going on in the labor market for the company to make as much on those houses.

BRIAN SOZZI: Yeah, and their guidance, too, Julie. They're looking for just another continued year of rising home prices. Where are these 3D printed homes? We need those homes, Julie. Where are they?

JULIE HYMAN: Not ready yet, I guess?

BRIAN SOZZI: They're coming. I hope they're coming. They do, in fact, look very cool, and I enjoyed your package. All right, another stock we are tracking is Caterpillar. On a bullish Cowen note, analyst Matt Alcott lifted his price target to $255 from $241 and maintained an outperform rating on the stock. Says Alcott, quote, "Conditions continue to improve for some of Caterpillar's key markets, namely mining, oil and gas, and rail equipment." Alcott adds, the market still doesn't appreciate what higher commodities prices could mean for Cat's bottom line.