Beazer Homes USA Inc. reported a narrowed fiscal third-quarter loss as the company slashed its land and land-development spending but continued to see home closings, sales prices and new orders slide.

Chief Executive Ian J. McCarthy said as "potential home buyers remain reluctant due to eroding consumer confidence amid concerns about employment growth, higher energy costs and the overall economy," the company expects "challenging" industry conditions will continue, and is maintaining "a disciplined and cautious operating approach."

For the quarter ended June 30, the Atlanta-based home builder reported a net loss of $109.8 million, or $2.85 a share, compared with a prior-year net loss of $118.7 million, or $3.09 a share. The latest results include $118.4 million in pretax charges, mostly from inventory write-downs and land-option contract abandonments, as well as write-downs of joint-venture investments and goodwill.

Revenue fell 40% to $455.6 million.

The mean estimates of analysts polled by Thomson Reuters were for a loss of $2.34 a share on $430 million in revenue.

Land and land-development spending plunged 60%. Home closings fell 37% to 1,677, with the average sales price sliding 8.8% to $257,400. The company's operations are centered in the East and South. The cancellation rate was 37%, compared with 36% a year ago.

New orders plunged 42% to 1,774. As of June 30, the company has a backlog of 2,716 homes with a sales value of $668.1 million, down 54% and 61%, respectively.

Mr. McCarthy said Beazer's principal operating goals include generating liquidity, cutting costs, limiting land and home investment and reducing unsold-home inventories.

Home builders have been struggling amid the dismal housing market, hurt by high inventories and foreclosures as well as sliding housing prices. Monday, the troubles drove Florida condominium developer WCI Communities Inc. to file for bankruptcy protection. Some analysts fear Beazer -- which in February announced plans to close its mortgage-origination operations and to stop building homes in some cities -- may be subject to a similar fate.

Fitch Ratings cut Beazer's issuer-default rating one notch further into the junk category in June. The ratings agency cited the current difficult housing environment and expectations for housing activity to be "even more challenging" than previously expected, as well as negative trends in Beazer's operating margins, further deterioration in its credit metrics and erosion in tangible net worth from noncash real-estate charges.

The ratings cut came a month after Beazer restated its earnings results for several prior years, attributing errors to accounting mistakes and inaccurate revenue recognition. An internal probe found employees in its mortgage-origination unit violated federal lending rules. Investigations by the Securities and Exchange Commission and the U.S. Attorney's Office are still ongoing.

Friday, Beazer said it plans to try to negotiate a settlement "that would allow us to quantify our exposure associated with reimbursement of losses and payment of regulatory and/or criminal fines, if they are imposed."

Beazer shares rose 2.9% to $6.10 at the close of trading Friday.

Write to Donna Kardos at donna.kardos@dowjones.com

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