KB Homes Sees 48% Cancellation Rate

Quote from Grandeur:

I should not have said anything, this was the start of a thread where one could have learned a lot about the posters.
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I guess we should not let them know the cancellation rate was 53% last Q. That's a total of 91% or BANKRUPTCY. hehe
 
Quote from TradinMadMan:

I guess we should not let them know the cancellation rate was 53% last Q. That's a total of 91% or BANKRUPTCY. hehe
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No.

The cancellation rate in Q3 was 53%, meaning that of all people who signed contracts to purchase a KB home in Q3, 53% canceled their contracts.

The cancellation rate in Q4 was 48%, meaning that of all people who signed contracts to purchase a KB home in Q4, 48% canceled their contracts.

You don't add the two quarters cancellation rates together.
 
Quote from ByLoSellHi:



You don't add the two quarters cancellation rates together.
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...Beating a dead horse. I was being sarcastic...according to how you were misreading the article. Stock would be greatly tumbling today. it's not.

I'm done here.
 
KB Home declares net loss
The No. 5 homebuilder says slump in housing market lead to land-related charges and cancellation rate jumped.
February 13 2007: 9:39 AM EST

CHICAGO (Reuters) -- KB Home posted a quarterly net loss Tuesday as it took $343.3 million of pretax land-related charges, a consequence of the U.S. housing market downturn, and said its cancellation rate rose to 48 percent.



http://money.cnn.com/2007/02/13/news/companies/bc.kb.results.reut/index.htm

Okay. If the cancellation rate "rose to 48%" percent, what does that mean?

I don't care if KBH shares are up today. That's irrelevant.
 
maybe this example will help.

1000 contracts signed.
qtr 1 2007 100 cancelled
qtr 2 2007 150 cancelled

50% rate increase in cancellations. not all 1000 cancelled

edit: or =+50% cancellation rate
 
Quote from TradinMadMan:

maybe this example will help.

1000 contracts signed.
qtr 1 2007 100 cancelled
qtr 2 2007 150 cancelled

50% rate increase in cancellations. not all 1000 cancelled
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Okay.

I'm pulling the conference call transcript to see if they specifically reference the absolute cancellation rate. If you're right, you're right.

The way it's been reported and written in the press releases is terrible, and is the source of my questioning the number.
 
Quote from ByLoSellHi:

No.

The cancellation rate in Q3 was 53%, meaning that of all people who signed contracts to purchase a KB home in Q3, 53% canceled their contracts.

The cancellation rate in Q4 was 48%, meaning that of all people who signed contracts to purchase a KB home in Q4, 48% canceled their contracts.

You don't add the two quarters cancellation rates together.
More...

Quote from TradinMadMan:

maybe this example will help.

1000 contracts signed.
qtr 1 2007 100 cancelled
qtr 2 2007 150 cancelled

50% rate increase in cancellations. not all 1000 cancelled

edit: or =+50% cancellation rate
More...

by your example tradinman and buylosellhi's pst there should be a decrease from q3 to q4 making his statement seem like the correct one...
 
Quote from ElCubano:

by your example tradinman and buylosellhi's pst there should be a decrease from q3 to q4 making his statement seem like the correct one...
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Exactly.

If they reported that that the Q3 cancellation rate was 53%, and the Q4 cancellation rate was 48%, how could it be that the rate of cancellation increased 48% in Q4?

If tradingmadman and grandeur are right, the cancellation rate would have been reported to have decreased by 5%. But it didn't.

I just looked at the 8k, and the absolute number of cancellations are not in there.
 
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