Home Builder KB Home Q4 Loss Narrows, But Revenue Down By 56%

New York, NY (AHN) - Home builder KB Home (NYSE: KBH) said Friday that its a fourth-quarter loss narrows on lower writedowns and improved margins, but missed expectations by the market analysts, pushing down its shares by more than 14 percent in morning trading.

The company reported a net loss of $307.3 million, or $3.96 per share, compared with a net loss of $772.7 million, or $9.99 per share reported a year earlier in the same period. The market analysts expected net loss of $96.9 million, or $1.19 per share in the quarter.

The fourth largest residential builders and a major player in the San Antonio market said revenue of the company dropped by as much as 56 percent for the period ended Nov. 30.

The Los Angeles company said revenue was down to $919 million in the quarter from $2.07 billion in the same period a year earlier.

"With unprecedented downward pressures continuing to confront the homebuilding industry and the overall economy, our operating strategy and key priorities at KB Home have not changed," Jeffrey Mezger, president and chief executive officer, said in a statement on Friday.

"We continue to pursue an aggressive agenda to maintain a strong financial position, restore the profitability of our homebuilding operations, and position our business for an eventual housing market recovery."

The results said it recorded write-downs of $408.2 million in the quarter for the period ended Nov. 30, from $514.2 million in the same period a year ago.

Housing revenues fell on a 52 percent decrease in homes delivered to 3,912 down from 8,132 in the fourth quarter of 2007, reflecting lower net orders for homes over the past several quarters, the company said.

"Housing market and general economic conditions in 2009 are expected to remain difficult or possibly worsen as the timing of any meaningful recovery for the homebuilding industry remains uncertain," said Mezger.

The average sales price of a KB home also dropped by 6.4 percent in the fourth quarter to $232,200, from $247,800 from a year-ago period.

Gross margin of the firm, excluding the write-downs, increased to 13.9 percent from 10.1 percent.

Shares of KB Home were moving down by 29 cents, or 1.99 percent, to $14.28 at 02:06 p.m. in New York Stock Exchange composite trading, after touching a low of $12.55 earlier in the session.