KB Home narrows first-quarter loss over 2009
Los Angeles builder KB Home reported a narrower loss in the first quarter compared with the first quarter of 2009 and predicted it would return to profitability later this year.
The company said Tuesday it had posted a net loss of $54.7 million, or 71 cents per share, for the quarter ended Feb. 28, compared with a net loss of $58.1 million, or 75 cents per share, for the first quarter of 2009.
The company’s share price fell 3.6%, or 63 cents, to $16.81 in early-morning trading. The results underscore the difficulty facing the home-building industry this year, which faces competition from steeply discounted foreclosure properties.
Although the economic crisis of early 2009 may have subsided, the market for new homes is still uncertain. Sales of new homes plunged 11.2% in January from December to their lowest pace since 1963.
Even so, Jeffrey Mezger, KB Home president and chief executive officer, said the economic picture had improved over the same period one year ago.
"The operating environment for the home-building industry is better today than last year at this time," he said. "Encouraging data in recent months suggest that a number of housing markets may be stabilizing or starting to rebound, though we do not yet see, in many respects, a sustained nationwide recover."
Orders of new homes increased 5% to 1,913 in the quarter from 1,827 orders in the first quarter of 2009. The company ended the quarter with $1.29 billion of cash and $1.82 billion worth of debt.
Revenues declined 14% in the first quarter, totaling $264 million, down from $307.4 million in the first quarter of 2009. That was the result of an 8% decrease in homes built and a 6% decline in the average selling price to $197,700.
-- Alejandro Lazo