KB Home, the fourth-largest U.S. home builder, reported a narrower fiscal fourth-quarter loss Friday but predicted more pain for the housing market this year.
Its net loss for the three months ended Nov. 30 shrank to $307.3 million, or $3.96 a share, from $772.7 million, or $9.99 a share, a year earlier, the Los Angeles builder said. Revenue fell 56%, to $919 million.
New-home sales in November dropped to a 17-year low nationwide, and the median house price declined 12%, to $220,400, according to the U.S. Commerce Department.
KB Home took quarterly charges of $265.9 million to write down inventory and land it no longer intends to build on.
"Housing market and general economic conditions in 2009 are expected to remain difficult or possibly worsen as the timing of any meaningful recovery for the home building industry remains uncertain," KB Home's chief executive officer, Jeffrey Mezger, said in a press release.
The builder was expected to report a net loss of $1.06 a share, according to the average of estimates by nine analysts in a Bloomberg survey.
KB Home's average home price fell 6.4% in its fourth quarter, to $232,000, and orders declined 50%, to 1,296.
The company's cancellation rate was 46%.
For the fiscal year ended Nov. 30, revenue was $3.03 billion, or 53% less than a year earlier, the company said.
The number of homes delivered in fiscal 2008 declined 48%, to 12,438, and the average selling price slid 10%, to $236,400.
In the year-earlier fiscal fourth quarter, the company had $917.6 million of writedowns and tax expenses, including $403.4 million on joint ventures and costs to write down land values and abandon options on property.
KB Home was founded in 1957 by Eli Broad and Donald Kaufman to sell homes to World War II veterans starting families. The company operates in 13 states, including California, Florida, Nevada, and Arizona.
"We believe KBH is in an extremely tough position in the near term," Pali International, a London investment research company, said in a note published last week. Its analysts cited a swollen inventory of unsold houses as KB Home's main challenge.
Its shares fell as much as 14% Friday. At midmorning they were off 11%, at $13. The shares have dropped 13% in the 12 months through Jan. 8, compared with a 5.1% decline in the Standard & Poor's Supercomposite Homebuilding Index.