Earnings reports continue to dribble in as the quarter winds down. Much of the attention this week will be on homebuilders KB Home (NYSE: KBH) and Lennar Corp. (NYSE: LEN) as investors look for any sign that the housing sector has bottomed (home sales numbers are also due out this week; see below). Analysts surveyed by Thomson Financial anticipate that both companies will report that they narrowed their losses in the most recent quarter.

KB Home's expected $1.25 per share loss, on revenue of $725.5 million, compares to the previous quarter loss of $3.30 and to a year-ago loss of $6.19. However, KB Home's losses in the past few quarters have been deeper than expected. The Los Angeles-based homebuilder's long-range earnings growth forecast is 10.5%, less than the S&P 500. Analysts continue to recommend holding KB Home, and have for at least 120 days. Shares, however, reached a new 52-week high of $31.69 on Friday, and they are up 10.5% year to date.

Lennar is expected to post a loss of 52 cents per share, on revenue of $1.1 billion. That compares to the previous quarter's per-share loss of 76 cents and to a year-ago loss of $3.25. While Lennar also has tended in the past few quarters to miss expectations, the Miami-based company managed a positive surprise in the first quarter of 2008. Lennar's long-range earnings growth forecast is 10.3%, about the same as KB Home's. Analysts also recommend holding Lennar. Friday, shares of Lennar also reached a 52-week high, $27.75, but they are down 6.4% year to date.

No, that's not a teaser from Motley Fool. Spectrum Control Inc. (NASDAQ: SPEC), maker of electric components for aerospace and telecommunications use, began the year trading at $9.92. The stock reached a high of $17.78 in mid July before losing some ground. This prompted company director James Tooley to sell 20,000 shares for $292,000 on 28 September. Turns out he should have held on, as the stock closed on 9 October at $17.15, having gained $2.60 since Tooley sold and the company reported good 3Q earnings. Don't feel too bad for Mr. Tooley. He still owns 33,442 shares of Spectrum Control, which shows no signs of losing ground in the near future.

Spectrum Control is organized into four business units, three of which showed little to no increase in revenue in 3Q 2007 earnings, primarily due to flat sales caused by a slow down in defense contracts spending. Nonetheless, long-term growth prospects look good for Spectrum as sales increased 73%, to $5.4 million, in the company's Sensors and Controls unit. This growth in sales was driven by both acquisitions and organic growth, especially as the company expands its product applications in medical and meteorological instruments. For the year so far, sales in this unit are up 126% to $15.5 million.

Given the growth in the snesors and control unit, Spectrum CEO Dick Southworth forecasts 4Q 2007 sales to be $35.5 - $36.5 million, or EPS of $0.24-0.26, a 60% increase. Everybody needs a few microcaps in the portfolio. This one looks interesting.

MOST NOTEWORTHY: TomoTherapy Inc (TTPY) and Anthracite Capital Inc (AHR) were today's notable initiations.

• TomoTherapy Inc (NASDAQ: TTPY) was initiated by a group of firms:

• Baird started TomoTherapy Inc with an Outperform rating, saying the Hi-Art system has several key competitive advantages that include a more conformal beam pattern, potential to better measure radiation dose delivery and greater ability to treat complex cases.

• William Blair and Piper Jaffray both believe the company has a substantial infrastructure to manufacture and support strong growth beyond the current 125 systems in the field, and started shares with an Outperform rating.

• Deutsche Bank initiated Anthracite Capital (NYSE: AHR) with a Hold rating, expecting the company to continue growing its portfolio by acquiring commercial real estate securities and CRE loans...

OTHER INITIATIONS:

• Lehman started Evergreen Solar (NASDAQ: ESLR) with an Equal Weight rating.

• Taleo Corp (NASDAQ: TLEO) was reinstated with a Buy rating at ThinkEquity.

• Needham initiated Spectrum Control, Inc (NASDAQ: SPEC) with a Buy rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).