LOS ANGELES – KB Home, the nation’s fifth-largest homebuilder, today said its profits fell 84 percent in the quarter ended Feb. 28 as the housing market slump continued.
The company said its net income for the fiscal first quarter fell to $27.5 million or 3 cents per share, from the year-ago $173.3 million or $2.01 per share, while its revenue fell 19 percent to $1.78 billion. KB predicted lower profits this year than last, though its cancellation rate shrank to 31 percent in the first quarter from the fourth-quarter’s 48 percent.
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The company’s results exceeded expectations, Bloomberg News said. Surveys by Thompson Financial and Bloomberg had predicted earnings of 25 cents per share and 32 cents per share, respectively.
“Having now entered the spring selling season, we continue to observe instability in the marketplace,” KB Home’s CEO Jeffrey Mezger said in a statement. “Moreover, recent problems in the subprime mortgage market combined with tightening credit requirements could exacerbate the already difficult conditions in the homebuilding industry.”
