NEW YORK (Reuters) - KB Home posted a worse-than-expected quarterly loss on Friday and said unprecedented pressures on the industry and the economy would remain difficult or worsen, sending its shares lower.
The No. 5 U.S. homebuilder said its net loss narrowed to $307.3 million, or $3.96 per share, in the fourth quarter ended on November 30, from $772.7 million, or $9.99 per share, a year earlier.
Wall Street had anticipated a loss of $1.51 per share, according to Reuters Estimates.
The widespread risky lending practices that fueled the U.S. housing boom of 2002-2006 -- and triggered the subsequent bust and credit crisis that has roiled Wall Street -- is at the heart of a deepening recession that is taking the housing downturn to a new and lower level, analysts say.
While the industry continues to groan under oversupply, foreclosures, plunging prices and stricter lending standards, it is also now beset by broader economic problems traceable to the housing crisis.
"Escalating unemployment is now the biggest housing problem," analyst Robert Stevenson of Fox-Pitt Kelton wrote recently. Also on Friday, the Labor Department said U.S. employers cut 524,000 jobs in December, pushing the national unemployment rate to 7.2 percent, the highest level in almost 16 years.
The slump, now entering its fourth year, has become a war of attrition as builders do what they can to survive: cutting jobs and dividends, leaving markets, and selling homes and land even at a loss in order to generate cash and manage debt.
KB's average selling price for the quarter fell 6 percent to $232,200 from a year earlier, while revenue from land sales plunged to $7.1 million from $50.3 million, the company said in a statement.
Total revenue fell 56 percent to $919 million because of weakening demand, rising foreclosures and tighter lending standards.
The Los Angeles-based company ended the year with $1.25 billion of cash and equivalents and during the quarter generated cash from operations of $311.1 million. Excluding the impact of the losses KB Home must acknowledge as its land declines in value, it achieved positive income from operations for the first time in five quarters, Chief Executive Jeffrey Mezger said.
But the company also carries $1.94 billion in debt, and its proportion of debt to capital rose to 70 percent at the end of fiscal 2008 from 54 percent a year earlier.
KB Home shares were down 2.8 percent at $14.16 in early New York Stock Exchange trade.
(Reporting by Helen Chernikoff; Editing by Lisa Von Ahn)
