Shares in KB Home sank more than 6 percent Tuesday after the homebuilder reported an increased loss and predicted more woes to come.
For the fourth quarter, which ended Nov. 30, KB reported a loss of $773 million, or $9.99 per share, versus a net loss of $49.6 million, or 64 cents, from the same period a year earlier. The year-earlier results included a 40 cent per share profit from discontinued operations.
The most recent quarter's results included pretax inventory and abandonment charges of $403 million, compared to similar charges of $343 million from a year earlier.
Revenue for the Los Angeles-based company dropped 31 percent to $2.07 billion, with home deliveries falling 22 percent along with the average sale price dropping 12 percent to $247,800, KB said.
Home orders for the quarter also fell 32 percent to 2,574, due to declining consumer confidence and an oversupply of homes on the market, KB said.
KB's Chief Executive Jeffrey Mezger said in a statement that "2008 will be another tough year for the homebuilding industry," and added that the crises in the home and credit markets have left a glut of houses, both new and foreclosed, on the market that have depressed home prices and demand among potential buyers.
KB Home also took a $514 million charge on the loss of deferred tax assets. In order to qualify for deferred tax assets, KB must be reasonably confident it will have taxable income in the very near future.
One bright spot for the homebuilder has been its co-branded homes it builds in nine communities across the country under the Martha Stewart name, which the company said have been selling well. The company is also set to launch a Walt Disney Co.-themed line of furnishings that will be exclusive to KB's homes.
Shares in KB Home plunged 6.1 percent to $17.35 in early trading Tuesday on the New York Stock Exchange. Shares in KB shed 59 percent in 2007.
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