Pulte Homes ( PHM) reported an $875 million loss in its fourth quarter, and weak new orders suggest the homebuilder may not be cutting prices aggressively enough. Pulte's loss amounted to $3.46 per share, worse than the 50-cent loss analysts expected, according to Thomson Financial. A year earlier, Pulte recorded a loss of $8.4 million, or 3 cents per share. The loss highlights the difficulties that homebuilders are having as land purchased at high prices during the housing boom now plummets in value. As builders such as Pulte aggressively cut prices on homes to clear land, they are forced to record large impairment charges that lead to heavy losses. Pulte recorded $543 million of inventory and land impairment charges, along with a $622 million tax charge related to a reserve for deferred tax assets. Revenue in the quarter fell 34% from a year earlier to $2.9 billion. The company's home closings dropped 31%, while the average sales price on these homes fell 6%. "The challenging market conditions that plagued the homebuilding industry for the first nine months of 2007 worsened in the fourth quarter," Pulte CEO Richard Dugas said in a statement. "Levels of new and existing home inventory remain elevated, buyer demand for new homes continues to be weak, and mortgage availability is still a problem for many prospective homebuyers." Pulte recorded a 29% plunge in orders, compared with a 7% order drop at Ryland ( RYL) and a 10% decline at Centex ( CTX). Pulte's weak orders suggest the company did not cut prices as much as its peers, wrote Bank of America analyst Daniel Oppenheim in a research note. "We think this will lead to two issues: further declines in margins when they adjust pricing and more importantly, increased cancellations as buyers in backlog see the lower prices," Oppenheim said.