Earnings preview: KB Home

OVERVIEW: The Los Angeles-based homebuilder is expected to report another quarterly loss as the housing sector continued to contract during what is typically one of the busiest selling seasons.

Like all major builders, KB has taken hefty charges to write down the value of unsold inventory and to forfeit deposits on land it no longer wants to buy.

A growing supply of unsold new and existing homes on the market, tight mortgage lending and industrywide discounting drove down sale prices and compressed margins.

Some markets around the country have shown signs of improvement. Construction activity continued to retreat and foreclosures rose to the fastest pace on record in recent months.

BY THE NUMBERS: Analysts expect KB to report a loss of 94 cents per share and revenue of $691 million, according to Thomson Financial.

The 10 earnings estimates range widely, from a loss of $2.25 to a loss of 16 cents per share--owing to some analysts' inclusion of expected charges.

ANALYST TAKE: Soleil Securities Group analyst Anna Torma said she expects KB's quarterly results "to reflect continued deteriorating conditions."

She predicts a loss of 94 cents per share, including $100 million in impairment charges--which would bring KB's total from the peak in 2006 to more than $2 billion.

WHAT'S AHEAD: Torma said the company is well-positioned to weather the continued downturn because it has reduced debt and its inventory of unsold homes.