KB Home posts loss on housing slump

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.

"Housing affordability challenges and tighter credit conditions in the subprime and near-prime mortgage market have also exacerbated current market dynamics, keeping prospective buyers out of the market, slowing the absorption of excess supply and further delaying a housing market recovery," Jeffrey Mezger, president and chief executive, said in statement.

KB Home reported a net loss of $148.7 million, or $1.93 per share, including discontinued operations in France, for its second quarter, ended May 31, compared with a year-earlier profit of $205.4 million, or $2.45 per share.

Revenue, excluding its soon-to-be-sold 49 percent stake in its French unit Kaufman & Broad SA, fell 36 percent to $1.41 billion. The sale is expected to close in the third quarter and generate gross proceeds of $800 million.

Analysts, on average, were expecting far higher revenue of $1.76 billion, according to Reuters Estimates.

The company joined Lennar Corp., the second-largest U.S. home builder, in reporting a quarterly loss this week due to the 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.

Home-builder CEOs, from Lennar's Stuart Miller to Toll Brothers Inc.'s Robert Toll, have said the housing market most likely would not improve this year and could decay further.

Home-building revenue fell 41 percent to $1.30 billion, as the number of homes sold declined 36 percent to 4,776 and the average selling price was down 8 percent at $271,600.