By John Spence

BOSTON (Dow Jones) -- KB Home said Friday its fourth-quarter loss was narrower than a year ago, but revenue and orders for new houses were roughly cut in half and the stock followed home-builder shares lower in early trading.

The company (KBH) before the opening bell reported a quarterly net loss of $307.3 million, or $3.96 a share, compared with a loss of $772.7 million, or $9.99 a share, in the year-earlier period.

It said total revenue dropped to $919 million from $2.07 billion as residential builders continue to feel the bite of the housing slump.

"Housing market and general economic conditions in 2009 are expected to remain difficult or possibly worsen as the timing of any meaningful recovery for the home-building industry remains uncertain," Chief Executive Jeffrey Mezger said in the earnings release.

KB Home's latest quarterly results included pretax charges of $265.9 million for inventory and joint venture impairments and land-option contract abandonments. The results also included $43.4 million to write off all remaining goodwill, and an after-tax charge of $98.9 million to record a valuation allowance against the net deferred tax assets.

In the fourth quarter of 2007, KB Home booked impairment charges of $403.4 million.

Fourth-quarter net orders fell 50% from the year-earlier period to 1,296 homes, the company said.

"We believe KB Home is in an extremely tough position in the near term from an order generation perspective as its build-to-order model gets slapped around in the current bloated inventory environment," said Pali Research analyst Stephen East in an earnings preview this week.

KB Home shares were down more than 10% in early trade Friday as the home-builder sector experienced heavy selling. Lennar Corp. (LEN) was off more than 20%.

Home builders are struggling against one of the worst U.S. housing corrections in history. Through October, national home prices were down more than 20% from their peak, according to the Case-Shiller price index published by Standard & Poor's.

In another sign that further weakening may be in store for the U.S. housing market, the National Association of Realtors earlier this week reported pending home sales fell 4% in November from the previous month.

CEO Mezger said "unprecedented downward pressures" are continuing to weigh on the home-building industry and the overall economy.

Economic turmoil, including massive job losses, continues to affect the housing market. The U.S. economy lost 524,000 jobs in December, closing out the worst year for job losses since World War II, the Labor Department said Friday in a highly anticipated report.

Although mortgage rates and home prices have come down and made houses more affordable, some analysts are warning that 2009 may end up being a bad time to buy a home as job losses mount.

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