KB Home loss wider than expected
CHICAGO (Reuters) - KB Home (KBH.N), the fifth-largest U.S. homebuilder, reported a wider-than-expected quarterly loss on Friday as pressure on home prices offset the company's first rise in home deliveries in three and a half years.
The company's shares were down 3.5 percent in premarket trading.
Los Angeles-based KB also said the value of its backlog shrank 18 percent to $648.2 million and company-wide net orders declined 23 percent, reflecting the expiration of a federal tax credit for homebuyers as well as "generally weak economic conditions."
Orders are a leading indicator for homebuilders as the companies do not book a sale until they close on the house.
KB is known for its "Open Series," a branded line of smaller, cheaper homes it launched during the economic downturn to capture the first-time homebuyer.
KB's numbers match those of rival Lennar Corp (LEN.N), which on Thursday reported a 10 percent dip in orders for the quarter, with the entire decline taking place in May, after the federal tax credit expired.
Sales of new U.S. homes nationwide dropped a record 32.7 percent in May to the lowest level ever as the boost from the tax credit faded, the Commerce Department said on Wednesday.
KB said its net loss narrowed to $30.7 million, or 40 cents a share, in the fiscal second quarter ended May 31, compared with a loss of $78.4 million, or $1.03 per share, a year earlier.
Revenue fell nearly 3 percent to $374.1 million. The average home selling price dipped 4 percent to $207,900, offsetting a 1 percent rise in deliveries, the first such rise in 14 quarters.
Analysts, on average, expected a loss excluding items of about 30 cents a share and a net loss of 28 cents a share on sales of $373.02 million, according to Thomson Reuters
In premarket trading, KB shares stood at $11.79, down 3.5 percent from their Thursday close on the New York Stock Exchange.
(Reporting by James B. Kelleher; Editing by Derek Caney and John Wallace)
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