NEW YORK (AP) — Shares of KB Home plunged Friday morning after the homebuilder posted a wider-than-expected loss for the first quarter.
Soleil Securities Group analyst Anna E. Torma said KB Home’s results did not bode well for the coming quarter and were well below her estimated loss of $1.96 per share.
“Results indicated deteriorating conditions for KBH, with no indications of a spring selling season,” Torma said in a client note. Torma left her “Hold” rating unchanged.
JPM Securities analyst James F. Wilson was also downbeat on KB’s earnings, saying its per-share loss exceeded his own forecast as well.
He noted that the company said its new home orders were down “substantially,” especially on the West Coast and in the Southeast.
Earlier Friday, KB Home said it lost $268.2 million, or $3.47 per share, in the fiscal first quarter due to a large write-down resulting from lower home prices. In the same quarter last year, the company reported a profit of $27.6 million, or 34 cents per share.
Latest results were well below Wall Street estimates of a loss of $1.17 per share for the quarter.
Shares of KB Home (KBH, Fortune 500), based in Los Angeles, slipped 86 cents, or 3.3 percent to $24.93 Friday morning.
Host of factors push down prices. Jeffrey Mezger, KB Home’s president and chief executive, said 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 during the quarter.
That forced the builder to take impairment charges and walk away from land option contracts.
“Until prices stabilize and consumer confidence returns, we believe inventory levels will remain significantly out of balance with demand,” Mezger said in a statement. “We do not anticipate meaningful improvement in these conditions in the near term, as it is likely to take some time for the market to absorb the current excess housing supply and for consumer confidence to improve.”
KB’s unit deliveries fell 43% to 2,928, and the average selling price dropped 7% to $248,200.
Net orders plunged from a year ago. Net home orders totaled 1,449, down 75% from 5,744 net orders a year earlier. The sharp decline came as …
