Shares in KB Home were flat Thursday morning after the homebuilder reported a second-quarter loss due to charges for unsold homes.

KB reported a second quarter loss of $149 million, (-$1.93 per share), a huge swing from a profit of $205 million ($2.45) from the same period a year earlier. The latest quarter included a pretax charge of $308 million to reflect the decreased value of unsold homes on its books and for walking away from deposits on land it no longer wants to buy.

Revenue for the Los Angeles-based company also fell 36 percent to $1.4 billion. The results were worse than Wall Street expected, a Thompson Financial poll found that analysts expected sales of $1.7 billion.

Housing revenue plunged 41 percent to $1.3 billion, as unit deliveries slipped 36 percent and the average selling price per home also dipped 8 percent to $271,600.

“Our second-quarter results reflect the current oversupply of new and resale housing inventory, a difficult situation compounded by aggressive competition and continued weak demand,” Jeffrey Mezger, KB’s chief executive said in a statement.

Last month KB sold its stake in French homebuilder Kaufman & Broad SA for about $812 million to Paris-based private equity firm PAI Partners. The French homebuilder reported a different picture than KB last week for its first half of 2007, posting a 17 percent jump in profits along with a 10 percent hike in sales thanks to strong apartment sales and more deposits placed to reserve homes, Kaufman & Broad said.

Mezger added that he could not predict when the market would improve, but he did say if the sale of the French operation goes through as planned, the company will book a profit for 2007, despite the big first-half charges.

“However, given current market conditions, we are not able to provide an earnings estimate for the year,” he lamented.

Shares in KB Home fell 18 cents to $40.25 in afternoon trading Thursday on the New York Stock Exchange.