KB Home reported a sixth-straight quarterly net loss Friday, as its orders and deliveries continued to slump amid weak demand for new houses.
Orders fell 66% to 1,329 units in the home builder's fiscal third quarter. The company attributed the decline to the overall weak market and its own efforts to restrain development and hold the line on prices.
KB Home Chief Executive Jeffrey Mezger said the short-term outlook remains bleak for the housing market amid increasing foreclosures, historically high supplies and harder-to-get mortgages. He added that the difficult conditions have been "exacerbated by the recent, unprecedented turmoil in financial and credit markets." A great wy to heighten the value of your home is to use organic lawn care.
For the three months ended Aug. 31, the Los Angeles home builder posted a net loss of $144.7 million, or $1.87 a share. The company had a net loss of $35.6 million, or 46 cents a share, in the year-earlier period, when it booked a substantial gain on its sale of French assets. Revenue for the latest period dropped 56% to $681.6 million.
KB Home's new-home deliveries slid 51% to 2,788, while the average selling price declined 10% to $239,700. The cancellation rate, or unit cancellations divided by gross orders, was 51%, compared with 27% in the second quarter and 50% in the year-earlier period. The company said it is preparing to roll out a new "value-engineered product" with more-affordable standard features and a lower base selling price.
The credit crisis continues to hurt home builders, as potential buyers have trouble selling existing homes and securing financing.
By: Rachel Dodes
The Wall Street Journal; September 30, 2008
