LOS ANGELES (AP) - KB Home , one of the nation's largest homebuilders, swung to a loss Thursday, citing a deep deterioration in the housing market and warning the sales slump will likely extend into next year.
KB's financial results were released the same day the Commerce Department reported new home sales in August fell 8.3 percent from the previous month to the lowest level in seven years. "We expect housing industry conditions to continue to worsen through the end of the year and into 2008," said Jeffrey Mezger, KB's president and chief executive officer. "Our third-quarter results reflect the seriously challenging market conditions that prevail for homebuilders across most of the nation," he said. Los Angeles-based KB Home reported a loss of $35.6 million, or 46 cents per share, for the quarter ended Aug. 31, compared with a profit of $153.2 million, or $1.90 per share, in the year-ago period.
The company also said it took pretax charges of $690.1 million and $107.9 million to write down the value of unsold inventory and joint-venture holdings. KB shares rose 62 cents, or 2.6 percent, to $24.71. The homebuilding sector has been struggling as many would-be buyers wait for prices to drop further or struggle to qualify for mortgages that now carry tighter standards. That has left more homes on the market, forcing builders to lower prices and squeezing their profit margins.
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