Lennar, KB Home expected to narrow Q2 losses

Anyone looking for good news in the housing sector will no doubt be keeping an eye on homebuilders Lennar Corp. (NYSE: LEN) and KB Home (NYSE: KBH) when they report second-quarter earnings this week. Both companies are expected by analysts surveyed by Thomson Financial to narrow their losses.

Lennar is expected to report net loss of 45 cents per share, as compared to a loss of 56 cents per share in the previous quarter and a loss of $1.55 per share in the year ago period. While the company hasn't posted a quarterly profit since the first quarter of 2007, the loss per share in the most recent quarter was 51 cents smaller than analysts had expected.

Miami-based Lennar is one of the largest homebuilders in the U.S., and it also provides financial services for home buyers. Even with the housing slump, the company had revenues in the past year of $10.2 billion, but its net loss totaled $1.9 billion. The company's long-term EPS growth forecast is 11.5%, which is less than the sector average and the S&P 500. The consensus recommendation of analysts remains to hold Lennar.

Shares closed Tuesday at $14.72, up from the 52-week low of $11.98 in January. The share price is down 62.9% from a year ago.