KB Home Stock Plummets After Disappointing Results
One of the nation’s largest homebuilders, Los Angles-based KB Home, saw its stock plummet further than it had in four months after reporting a bigger-than-expected loss as orders for new homes plunged. The stock was down as much as ten percent during Tuesday’s session after the company reported its net loss for the last quarter was $1.49 per share, more than doubling a loss of 71 cents per share the year before. Analysts had forecast a loss of just 30 cents a share in a recent Bloomberg News survey.
Homebuilders across the US are struggling to contend with steeply-discounted distressed properties and lower demand as the nation’s jobless rate continues to hover close to 9 percent. KB Home builds houses in a number of the markets hit hardest by foreclosures, including Las Vegas, Riverside County in California, and Phoenix in Arizona.
Sales of new homes in the US fell 16.9 percent in February to a record low pace, according to a March 23rd report from the Commerce Department. The median sales price for homes, meanwhile, dropped nearly 9 percent from a year ago to the lowest reported in more than seven years. KB Home’s net loss of $114.5 million included an impairment charge of $57.3 million and a $22.8 loss on a loan guaranty related to a development in Henderson, Nevada.
KB’s revenue declined 25 percent from a year ago to $196.9 million for the quarter ended February 28th, while net orders dipped 32 percent to 1,302. Deliveries of new homes, meanwhile, fell 28 percent from the prior year to just 949.