KB Home, the No. 5 U.S. home builder, posted a quarterly net loss Thursday as revenue dropped sharply due to the weak housing market.
KB Home said the results reflected an oversupply of new and existing homes, aggressive competition and weak demand. It said it could not provide a full-year earnings forecast or predict when market conditions may improve.
The company, whose shares were nearly unchanged, joined Lennar , the second-largest U.S. home builder, in reporting a quarterly loss this week due to a steep downturn in the U.S. housing market.
The market has been pressured for more than a year in many areas due to high prices and rising interest rates that have deterred buyers and forced some real estate speculators to retreat. Earlier this week, the government reported that U.S. home sales fell 1.6 percent in May.
KB Home reported a net loss of $148.7 million, or $1.93 per share, including French discontinued operations, for its second quarter ended May 31, compared with a year-earlier profit of $205.4 million, or $2.45 per share.
Revenue, excluding discontinued French operations, fell 36 percent to $1.41 billion.
Analysts on average were expecting far higher revenue of $1.76 billion, according to Reuters Estimates.
Housing revenue dropped 41 percent as unit deliveries declined 36 percent to 4,776 and the average selling price was down 8 percent at $271,600.
KB Home reported a loss from continuing operations of $174.2 million, or $2.26 per share, largely due to a pretax charge of $308.2 million from inventory and joint venture impairments and abandonment of land contracts.
The charges came from price cuts in housing markets across the United States in the spring selling season, KB Home said.
Depressed land prices due to the market conditions also led to some project cancellations.
Net orders for new homes were off 3 percent at 7,265 because of a sharp drop in the central region. That was a substantial improvement over the previous three quarters.
The company's cancellation rate was 34 percent, essentially unchanged from the prior quarter.
KB Home shares were down 3 cents at $40.40 in morning New York Stock Exchange trade. The stock, which hit a nine-month low on Wednesday, is down 21 percent year to date.