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KB Home’s stock gets a boost after profit and sales beat expectations

KB Home’s stock rose 1.4% in premarket trade Thursday, after the home builder topped profit and sales expectations, as lower-than-expected deliveries were offset by a bigger-than-expected rise in average selling prices. For the quarter ended Aug. 31, earnings slipped to $23.3 million, or 23 cents a share, from $28.4 million, or 28 cents a share, but beat the FactSet EPS consensus of 22 cents. Revenue climbed 43% to $843.2 million, well above the FactSet consensus of $817 million. Home deliveries increased 25% to 2,236, below the FactSet consensus of 2,307, but the 9% increase in the average selling prices to $357,200 was above the FactSet consensus of $346,380. Net orders grew 19% to 2,167, missing the FactSet consensus of 2,316. “Our third quarter results showed broad-based improvement in virtually all key operational and financial metrics across our four regions,” said Chief Executive Jeffrey Mezger. The stock has dropped 13% year to date through Wednesday, while the S&P 500 has slipped 5.8%.

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U.S. jobless claims rise 3,000 to 267,000

WASHINGTON (MarketWatch) – New applications for U.S. unemployment benefits inched up by 3,000 to 267,000 in the seven days ended Sept. 19. The latest report on initial claims fits with a healthy labor market. Economists surveyed by MarketWatch had forecast initial claims to rise to 275,000. Claims had fallen by 17,000 in the prior two weeks. The average of new claims over the past month, meanwhile, edged down by 750 to a seasonally adjusted 271,750, the lowest level in a month, the Labor Department said Thursday. The four-week average smooths out sharp fluctuations in the more volatile weekly report and is seen as a more accurate predictor of labor-market trends. Continuing jobless claims declined by 1,000 to 2.24 million in the week ended Sept. 12. These claims reflect people already receiving unemployment checks.

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S&P places Volkswagen’s A rating on review for a potential downgrade

Standard & Poor’s on Thursday placed its A rating on Volkswagen AG on CreditWatch negative, meaning it could downgrade the rating in the near term. The move comes after the German car maker said it will book a 6.5 billion euro provision to cover the costs of a recall of 11 million cars, after it was found to have used special software to fudge emissions tests. “We expect VW to incur substantial remediation costs to correct the engines of the cars affected and potentially face material fines from regulators,” S&P wrote in a statement. “Criminal charges in the U.S. may also follow.” The rating agency also placed the ratings on all of VW’s core subsidiaries on CreditWatch Negative, including its captive finance arm Volkswagen Financial Services AG (VW FS), its subsidiary Volkswagen Bank GmbH, and finance subsidiary Volkswagen Group Services S.A., as well as its A long-term issuer credit and financial strength ratings on captive insurer Volkswagen Insurance Co. Ltd. S&P said it may lower the company’s ratings by one or more notches. “This incident could also indicate a wider industry problem, if other manufacturers have followed similar practices, and it may lead to tougher industry-wide regulations and requirements for diesel engines,” said the statement. Volkswagen U.S.-listed ADRs were down 0.9% in premarket trading, while its German shares were higher.

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General Electric to create 1,000 energy-sector jobs in the U.K., not the U.S.

General Electric Co. said on Thursday it would create 1,000 new energy-sector jobs in the U.K., after reaching an agreement to access export financing for up to $12 billion with the U.K. export credit agency. The company said the new jobs will support orders it has won, and expect to win, in international markets including Brazil, Ghana, India and Mozambique. Last week, GE said it was moving 500 American jobs overseas, after Congress failed to reauthorize the U.S. Export Import Bank. “In today’s competitive environment, countries that have a functional Export Credit Agency (ECA) will attract investment,” said GE Chief Executive Jeff Immelt. “Export finance is a critical tool we use to support our customers. Without it, we can’t compete against foreign competitors who enjoy ECA financing from their governments.” GE’s stock, which slipped 0.6% in premarket trade, has lost 0.5% year to date through Wednesday, while the Dow Jones Industrial Average has shed 8.7%.

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Restaurant consultant, friends charged by SEC with insider trading in PF Chang’s

A restaurant consultant and his friends were charged by the Securities and Exchange Commission with insider trading in then publicly traded PF Chang’s Bistro Group. The SEC alleges that Richard Condon, a consultant to Panda Restaurant Group, tipped off three friends that PF Chang’s was going to be approached by Panda with a takeover bid, and that the friends bought out-of-the-money stock options in PF Chang’s. One of the friends has died and has not been charged; another, Ali Sagheb, agreed to pay $19,829 to settle the case; while a third, Jonathan Ross, is still in litigation with the SEC, as is Condon. Centerbridge Partners ended up buying PF Chang’s.

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Conatus Pharma shares jump after drug study results

Conatus Pharmaceuticals Inc. shares rallied in the extended session Wednesday after the microcap biotech company said one of its drugs lowered blood pressure in a critical vein servicing the liver in patients with cirrhosis. Conatus shares jumped 35% to $7.74 on heavy volume. The company said its mid-stage clinical trial of the drug emricasan showed it significantly lowered blood pressure in the hepatic portal vein, which connects the gastrointenstinal tract to the liver, in cirrhosis patients who also had severely high blood pressure.

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