Revenue rose 1% to $3.55 billion.
Analysts, on average, expected a net loss of $1.14 a share on revenue of $2.73 billion, according to Reuters Estimates.
KB shares rose on the New York Stock Exchange. The Dow Jones U.S. Home Construction Index, a yardstick that measures home builder performance, rose 1.5%.
Net orders fell 38% to 6,059. The cancellation rate was 48% in the fourth quarter, up from 31% a year earlier but improved from 53% in the third quarter.
Gross margins fell to 11.7% including the land charges, and 18.8% without them from a record 27.1% in the fourth quarter 2005, in part because of sales incentives used to entice buyers.
"While this is slightly backward-looking given KB's November fiscal year, as opposed to other builders' recently reported results for December-end quarters and commentary on January trends, we remain encouraged that, similar to other builders, KB's orders and (cancellation) rates both showed modest sequential improvement," JP Morgan analysts Michael Rehaut wrote in a note.
The company, whose stock options practices have prompted a formal government probe and forced its long-time chief to step down, said it will file restated financial results for the quarter ended Aug. 31, 2006, as well as its annual report for fiscal 2006.
"Both reports include restated financial statements for prior periods," it said.
The quarterly results were delayed while it conducted a review of its stock-option grant practices.
The company did not issue an outlook for its current fiscal year, citing uncertain market conditions, but said it sees 2007 sales, revenues, gross margins and earnings per share below 2006 levels.
With the current quarter closing in two weeks, the company said it has seen cancellation rates return to more normalized levels, but foot traffic and net orders are down about 10% compared with last year.
"We are just now entering the peak selling season, and we will have a much better feel for our financial outlook for the year in another 10 to 12 weeks," Jeffrey Mezger, the chief executive, said during an call with analysts. "We expect the next two quarters to be challenging, with continued pressure on pricing until supply and demand become more in balance."