KB Home Losses Continue To Mount

Los Angeles, CA, January 8, 2008—Home builder KB Home said its fourth quarter losses rose as a result of the turmoil in the housing market.

CEO Jeffrey Mezger said that 2008 "will be another tough year for the homebuilding industry."

The company reported a loss of $772.7 million, or $9.99 per share, compared with a loss of $49.6 million, or 64 cents per share a year ago.

The California-based builder took a pretax charge of $403.4 million to write down the value of unsold inventory and book losses from joint ventures.

Sales fell 31 percent to $2.07 billion from $3.01 billion in the prior-year quarter.

KB Home said the sales decline was due mostly to a 22 percent drop in new home deliveries, which fell to 8,132 compared to 10,386 in the same quarter of 2006.

The average selling price was also down 12 percent to $247,800 from $280,000 in the fourth quarter of 2006.

"The challenging market conditions we experienced through the first three quarters of 2007 continued during the fourth quarter," Mezger said in a press release.

The company's backlog of orders for new fell 40 percent during the quarter.