Shares of KB Home plunged more than 15 percent Wednesday after the Los Angeles homebuilder said its fiscal second quarter loss more than doubled on slower construction and more than $30 million in charges.
The company, which is the nation’s fifth largest homebuilder, reported a net loss of $68.5 million (-89 cents per share) for the quarter ended May 31, compared with a loss of $30.7 million (-40 cents) a year earlier.
Revenue fell 27 percent to less than $272 million. The company built 1,265 homes during the quarter, 29 percent fewer than a year ago, and orders were down 11 percent to 1,998. A bright spot in the report noted that that average selling price was up 3 percent.
Analysts surveyed by Thomson Reuters on average had expected a per-share loss of 31 cents on more than $291 million in revenue.
“Uncertainty and caution about the economy are keeping many qualified homebuyers from entering the market, even though historically high housing affordability makes this a good time to buy,” Chief Executive Jeffrey Mezger said in a statement. “We believe the current housing market conditions will likely continue until there are meaningful and sustained improvements in job growth and consumer confidence.”
The results include $20.6 million in charges for inventory impairments and land option contract abandonments, and a loss of $14.5 million on a loan guarantee. The later change is related to a failed joint venture called Inspirada, a 14,500-home master-planned community near Henderson, Nev. that fell victim to housing downturn.
Shares closed down $1.84, or 15.4 percent, to $10.08 on the New York Stock Exchange.
