Industry News

KB Home loses nearly $1 billion in ’07

Company's net worth becomes an issue for creditors

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KB Home saw fourth-quarter losses hit $772.7 million as the company cut prices but sold fewer homes, and recognized $403.4 million in losses on its remaining inventory, joint ventures and abandoned land option contracts. The Los Angeles-based home builder said fourth-quarter housing revenue fell 31 percent, to $2.02 billion, compared to the same quarter a year ago. The number of homes sold during the quarter dropped 22 percent compared to a year ago, and the average price of those homes was down 11.5 percent. KB Home delivered 8,132 homes during the fourth quarter, with an average sales price of $247,800, compared with 10,386 homes delivered a year ago at an average price of $280,000. For fiscal year 2007 -- which for KB Home's accounting purposes ended Nov. 30 -- home sales were down 26 percent, to 23,743, and the average home price fell 9 percent to $261,600. As a result, revenue for the year totaled $6.42 billion, down 32 percent from 2006. Nevertheless, KB Home was able to reduce i...