Homebuilder KB Home on Tuesday reported a smaller net loss for the first quarter, citing improved margins on home sales.

The Westwood company had a net loss of $54.7 million (-71 cents a share) for the quarter, compared with a net loss of $58.1 million (-75 cents) for the first quarter of 2009.

The improvement came mostly from a higher gross margin on home sales. Margins increased to 13.7 percent in the recent quarter, up from 4.9 percent a year ago.

“The operating environment for the homebuilding industry is better today than last year at this time,” Chief Executive Jeffrey Mezger said in a statement. “We currently expect housing market conditions to follow a generally positive trajectory throughout this year and into 2011. … We believe that KB Home is positioned to return to profitability in the latter part of this year.”

Following the announcement of the quarterly results, KB Home shares were trading at $16.82, down 69 cents or 4 percent on the New York Stock Exchange.