KB Home on Friday reported a lower loss in the second quarter but it was worse than expected. Shares fell 9 percent on the news.

The Los Angeles company reported a net loss of $78.4 million (-$1.03 a share), compared with a loss of nearly $256 million (-$3.30) a year ago. Revenue fell 40 percent to almost $385 million.

Analysts surveyed by Reuters Estimates expected a 72-cent loss.

Net orders dropped 31 percent to 2,910 homes from a year ago. The homebuilder reported a backlog of 3,804 homes, reflecting potential future revenue of $797 million, compared with a backlog of 6,233 homes a year ago, then estimated as being worth nearly $1.5 billion.

“Prevailing recessionary economic conditions weighed heavily on the homebuilding industry and on our operations during the second quarter,” Chief Executive Jeffrey Mezger said in statement.

The company’s quarterly release follows news earlier this week that sales of new homes fell in May nationwide as builder discounts failed to help new properties competing with a glut of foreclosed homes. Sales dropped 0.6 percent from the month before, the Commerce Department reported.

KBHome shares closed down 1.35, or 9 percent, to $13.42 on the New York Stock Exchange.