KB Home's revenue drops 25% on lower housing demand
Homebuilder KB Home saw its revenue plummet 25% and its net loss deepen in the first quarter as the builder faced headwinds from the elimination of a federal homebuyer tax credit and a drop in demand. The Los Angeles-based homebuilder posted a net loss of $114.5 million, or $1.49 per share, for the first quarter ending Feb. 28. That loss is tied directly to pretax charges, inventory impairments, a joint-venture impairment charge of $53.7 million and a loss on a loan guaranty of $22.8 million. Comparatively, the company deepened its first-quarter loss, with KB posting a net loss of $54.7 million, or 71 cents per share, for the same quarter a year earlier. During the same period, the company's revenue fell 25%, hitting $196.9 million, compared to $264 million in the first quarter of 2010. "Despite the many headwinds that persist in today's housing markets, our year-over-year pretax results, excluding non-cash charges and the loss on loan guaranty, improved for the fourth consecutive quarter," said Jeffrey Mezger, president and chief executive officer. In the first quarter, the homebuilder continued to face a declining housing market with net orders hitting 1,302 homes, down from 1,913 homes a year earlier. The company's after selling price during the period rose 4% from a year ago to $205,700. A decline in home sales is impacting large builders nationwide. Beazer Homes USA said Monday that it is diversifying its business model. The building firm announced the launch of a new rental division in which the company will acquire quality, distressed real estate and rent the properties out to customers who cannot obtain mortgages. The builder's program is launching in Phoenix. Write to Kerri Panchuk.