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KB Home Posts Smaller Loss But Misses Expectations

Tuesday, 23 Mar 2010 09:27 AM

 

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KB Home posted a smaller loss its fiscal first quarter, as the homebuilder saw signs of stability in the housing market.

KB Home said Tuesday its new home orders increased 5 percent to 1,913 in the quarter compared with the prior year. In another positive sign, the number of buyers canceling contracts fell to 22 percent from 28 percent a year ago.

"A number of housing markets may be stabilizing or starting to rebound, though we do not yet see, in many respects, a sustained nationwide recovery," said Jeffrey Mezger, the company's president and chief executive officer.

The company, he added, expects to become profitable again later this year.

The latest results, however, were weaker than analysts had forecast. Its shares slipped 17 cents to $17.27 in premarket trading.

The company said it lost $54.7 million, or 71 cents per share, in the three months ended in February. That compares with a loss of $58.1 million, or 75 cents a share, a year earlier. Analysts expected a loss of 42 cents a share.

Revenue dropped 14 percent to $264 million from $307.4 million a year ago. That was below analysts' forecast for revenue of $277 million.

The company, based in Los Angeles, has operations in 10 states and was ranked the nation's fifth-largest homebuilder in 2008 by Builder magazine.

Large builders have seen home orders improve since last year thanks to low interest rates and government incentives.

Still, high unemployment and job insecurities are keeping some buyers on the fence. Sales of newly built homes plunged 11 percent to a record low in January, the third consecutive monthly decline.

The sales decline this year has been partly due to record snowstorms that struck many parts of the country. But many would-be buyers also appear to have lost some of their urgency after lawmakers extended a homebuyer tax credit that had been set to expire at the end of November.

Now homebuilders are hoping buyers will turn out for the traditional spring shopping season to seize on the tax credits — $8,000 for new buyers and $6,500 for those who have previously owned a home. Both incentives sunset at the end of next month, although buyers have another two months to close on their deals.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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