KB Home Announces Increase in Losses Due To Slow Home Sales

Things just aren’t getting better in the housing market as KB Home announced on Tuesday that its loss for the first quarter of the current fiscal year had increased relative to last year. The company explained that this was due to the lower production on the part of homebuilders and fewer orders from buyers.
However the company did say it was glad by an increased activity in the housing market during the early parts of the spring season, which is renowned for home selling.

In statistics released on Tuesday the Los Angeles based KB Home announced a loss of $114.5million for the quarter that ended at the end of February. This comes out to a loss of $1.49 per share. A charge of $45.1 million is included in these figures. A year ago the same figures read as follows: the company suffered a loss of $54.7 million or $0.71 per share. This is way more than what experts had forecasted: a loss of $0.25 per share.

The widening of the first quarter loss was not the only bad news that the company gave to its investors, they also announced that revenue in the quarter had fallen by 25% and now stood at $196.9 million. It previously stood at $264 million and was far bellow the $225 million predicted by Wall Street Analysts.

The net home orders also saw a plunge in this quarter, with orders falling from 1,913 to 1,302. This was a plunge of more than 30%. While the number of homes delivered to KB Home from homebuilders fell below the thousand homes mark. The homebuilders delivered 949 homes in the quarter, a fall of 28 %.

The release of the new data did not go well with investors as KB Home stock prices fell in premarket trading. The share price fell by 8%, which turns out to be $0.99. In premarket trading the share price stood at $11.21.

KB Home operates in 12 states across the US and its target market comprises mostly of fresh buyers, move up buyers, and senior citizens.

Despite a bad start to the fiscal year the company is hoping for an increase in sales during the spring season.

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