(RTTNews) - Home builder KB Home (KBH: News ) on Friday reported a narrower loss for the third quarter, helped by lower expenses and cancellation rate as well as an increase in net orders. Revenues, however, declined from the previous year due to a drop in houses delivered and average selling price. Looking ahead, the company said the market ''remains in a transition where it will likely be some time before we see meaningful improvement in the economic conditions that are essential to our industry's future growth.''

The Los Angeles, California-based company builds various types of homes, including attached and detached single-family homes, townhomes, and condominiums. It also offers mortgage services in a joint venture with Countrywide KB Home Loans.

Net loss for the quarter narrowed to $66.05 million or $0.87 per share from $144.75 million or $1.87 per share in the prior year. The latest results included pretax, non-cash charges of $47.7 million for inventory and joint venture impairments and the abandonment of land option contracts. In the previous year, results included pretax, non-cash charges of $82.2 million for inventory and joint venture impairments.

On average, 16 analysts polled by Thomson Reuters expected the company to report a loss of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined to $458.45 million from $681.61 million in the previous year, as housing revenues dropped due to a 20% decrease in homes delivered and a 15% decline in the average selling price, compared to the previous year. Analysts had estimated quarterly revenues of $458.90 million.
In Home Building, revenues dropped to $456.35 million from $679.12 million in the prior year. Revenues from Housing in the just concluded period was $454.21 million, while Land revenues were $2.14 million. Revenues at Financial Services slipped to $2.10 million from $2.50 million.

Costs and expenses declined to $498.45 million from $786.94 million in the previous year. Selling, general and administrative expenses totaled $83.9 million in the third quarter of 2009, down from $133.2 million in the year-earlier period. Cancellation rate as a percentage of gross orders improved to 27% from 51% in the third quarter of 2008.

Net orders increased 62% to 2,158 from 1,329 in the third quarter of 2008, with each of the company's geographic regions experiencing year-over-year net order growth. The company attributed the growth in net order to the new product line, The Open Series, and a lower cancellation rate.

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