LOS ANGELES ( TheStreet) -- KB Home ( KBH) shares jumped in morning trading Friday after the homebuilder drastically narrowed its quarterly losses, beating expectations, helped by fewer charges and higher revenue. KB Home posted quarterly losses of $1.4 million, or 2 cents loss per share, compared with year-earlier losses of $66.1 million, or 87 cents loss per share. Analysts expected the builder to lose $12.8 million, or 15 cents per share.
Revenue jumped 9.3% to $501 million. It was the first time in 4 years that KB Home booked revenue growth. Inventory impairments and land option contract abandonment charges totaled $3.3 million, sharply lower than year-earlier charges of $47.7 million. KB Home improved its gross margins and moved from being an industry laggard to in-line with its homebuilder peers, noted Stifel Nicholas analyst Michael Widner. Another key positive in the report was word that KB Home's average sales price rose to $214,200, up 5.6% from year-earlier results, the analyst said, though he pointed out that the gain was mostly a function of heavily concentrated price gains in California. The average price of a KB Home house sold on the West Coast jumped 14.9% to $353,200. Widner did add the KB Home's report included some negative aspects, namely a 39% drop in year-over-year order volume, significantly below his expectations. He also cautioned that low third-quarter orders and a smaller backlog had "set up the next two quarters as likely tougher than previously expected for EPS." Earlier Friday morning the Commerce Department reported that sales of newly-built homes were flat in August at a seasonally adjusted annual rate of 288,000, flat from July's upwardly revised data. July's results were originally reported at a sales pace of 276,000, the worst on record until Friday's adjustment to 288,000. May's new-home sales pace of 282,000 was the slowest pace on record.