KB Home reported a smaller fiscal second quarter loss on Friday but the results missed Wall Street expectations and net orders for homes fell as a federal tax credit ended.
Low mortgage rates and the federal homeowner tax credit have helped the home market, but the credit ended in April.
Shares of the Los Angeles homebuilder fell 70 cents, or 5.7 percent, to $11.52 in morning trading.
KB Home said its net loss was $30.7 million, or 40 cents per share, for the three months ended May 31. That compares to a loss of $83.6 million, or $1.03 per share, in the prior-year period.
A year ago, the company recorded $49.5 million in asset impairment and land option contract abandonment charges. There were no such charges in the latest quarter.
Analysts polled by Thomson Reuters were expecting a smaller loss of 30 cents a share.
Revenue fell 3 percent to $374.1 million from $384.5 million a year ago. Analysts predicted revenue of $373 million.
Net orders fell 23 percent from a year ago due to the uncertain economy and the federal homebuyer tax credit's expiration at the end of April. Still, they rose 17 percent sequentially from the prior quarter.
CEO Jeffrey Mezger said the sequential improvement in net orders "bodes well for our ability to generate future revenue growth."
Also, homes delivered edged up 1 percent to 1,782, the first rise in fourteen quarters. The average selling price fell 4 percent compared to a year ago, to $207,900.
Nationally, sales of new homes collapsed in May, sinking 33 percent to the lowest level on record, the government reported earlier this week. KB's fiscal second quarter ended May 31.
Experts believe the tax credits — $8,000 for first-time home buyers and up to $6,500 for current homeowners — pulled sales that would normally have taken place in May or June, ahead to March and April.
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