KB Home Posts Quarterly Loss
Affected by the weak housing market, KB Homes posted a wide quarterly loss as sales sank and the company took a big tax charge. "2008 will be another tough year for the homebuilding industry", said President and Chief Executive Jeffrey Mezger.
The Los Angeles home builder recorded a net loss of $772.7 million, or $9.99 a share, for the quarter ended Nov. 30, versus a net loss of $49.6 million, or 64 cents a share, a year earlier. Year earlier results included 40 cents in earnings from discontinued operations.
The latest quarter's results included $403.4 million in pretax inventory and joint-venture impairments and the abandonment of certain land option contracts. Such costs totaled $343.4 million a year earlier. As a result of the charges, the company needs an amendment to its lending capacity.
KB Home also took a $514.2 million charge on the loss of deferred tax assets. To qualify for deferred tax assets, a company must be reasonably confident it will have taxable income.
Revenue dropped 31% to $2.07 billion, with home deliveries falling 22% to 8,132 and the average sale price dropping 12% to $247,800. Net home orders slid 32% to 2,574. The company blamed decreased consumer confidence and oversupply among the reasons for lower sales.
Published on January 8, 2008
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