Homebuilder KB Home Reports New Order Surge

Los Angeles, CA, June 26, 2009--KB Home said Friday its new home orders in the second quarter surged 59 percent over first-quarter levels.

KB Home lost $78.4 million, or $1.03 a share, for the three months ended May 31. In the second fiscal quarter last year the company lost $255.9 million, or $3.30 cents a share.

Analysts had expected a smaller loss of 64 cents a share. Their estimates typically exclude one-time items.

Quarterly revenue tumbled 40 percent to $384.5 million.

Despite the increase in new orders, CEO Jeffrey Mezger remained cautious, saying only that "We are beginning to see signs that some negative housing market trends may be moderating at both the local and national levels."

To compete against heavily discounted foreclosures, KB Home last year rolled out its Open Series houses, which featured smaller and less expensive homes.

The average sales price was $216,200, down 5 percent from the year before, but up from $210,700 in the first quarter.

While the company's new home orders, which totaled 2,910 in the period, were up from the beginning of the year, they were 31 percent lower than the second quarter last year.

About one in five homebuyers got cold feet and backed out of the contract, but that was better than the 27 percent cancellation rate a year ago.