KB Home sees big loss in first quarter
National home builder KB Home saw a wide loss in the first quarter, falling into the red by $268.2 million, compared with earnings of $27.5 million in the same period last year. Total revenues fell 42.9 percent to $794.2 million from $1.39 billion in the same period last year.
“The first quarter of 2008 continued to be challenging,” said Jeffrey Mezger, CEO and president of KB Home, in a conference call with investors. “Many potential buyers either cannot or will not make a purchase commitment today. Some are worried about losing their jobs, others believe prices have further to fall. Many are simply unable to qualify for financing, given the more restrictive lending environment.” Mezger also said competition for buyers is “fierce” in the current housing market.
Despite those bleak sentiments, Mezger went on to say the downward trend was anticipated and marks an acceleration that eventually will bring the market closer to recovery.
KB Home, like most large home builders in recent fiscal quarters, recorded most of its losses from land impairment charges, from selling off land for lower than its purchase price or losing money over land option contract fees. In all, the company took $224 million in impairment and land abandonment charges.
KB Home is headquartered in Los Angeles, with operating divisions in nine states.