Revenue Sinks at KB Home

Updated from 9:18 a.m. EDT

KB Home (KBH Quote) became the second U.S. homebuilder this week to post dismal numbers, saying its third-quarter revenue slumped 32% from the same period a year earlier.

Owing to the slowdown in the housing market, revenue totaled $1.54 billion for the quarter ended Aug. 31, compared with $2.28 billion a year ago. Home deliveries declined 28% year over year to 5,699, and the average selling price of houses fell to $267,700 from $288,000.

KB had a loss from continuing operations, net of an income tax benefit, of $478.6 million, or $6.19 a share. The results reflect $690.1 million in pretax noncash charges related to inventory and joint-venture impairments and the abandonment of land option contracts, along with $107.9 million for a goodwill impairment.

A year ago, KB's continuing operations generated after-tax income of $129.3 million, or $1.60 a share. Discontinued operations in France contributed third-quarter after-tax profits of $443 million, or $5.73 a share, including a gain realized on the sale of the business.

Overall, the company posted a loss in the 2007 third quarter, including the French discontinued operations, of $35.6 million, or 46 cents a share, compared with net earnings of $153.2 million and $1.90 a share a year earlier.

KB's backlog at Aug. 31 totaled 11,880 homes, representing potential future housing revenue of $3.07 billion. However, that was down 31% and 38%, respectively, from the 17,198 backlog units and $4.95 billion backlog value one year ago.