Los Angeles-based homebuilder KB Home reported a smaller loss for the quarter ended August 31 owing to an increase 62 per cent in orders for the new homes.

KB Home posted a loss of $66 million for the third quarter as compared with a loss of $144.7 million during the same period of 2008, representing a loss of 87 cents per share, down from $1.87 per share a year earlier.

KB said builder's cancellation rate fell to 27 in the third quarter as compared with 51 per cent in the same quarter of 2008.

Jeff Mezger, president and CEO of the company, said, "Our primary objective remains restoring profitability and our third quarter results show real progress."

In the third quarter sales were 30 per cent more than the record low in January.

KB Home's revenue plunged 33 per cent to settle at $458.5 million against $681.6 million last year.

Shares in KB Home, which operates in ten US states, plunged 8.5 per cent to close at $16.96.