DOW JONES NEWSWIRES
Hovnanian Enterprises Inc. (HOV) swung to a fiscal first-quarter
loss that was worse than analysts had expected after a year-earlier
quarter that included $291.3 million of tax benefits.
"While we were encouraged by the typical seasonal increase in
both traffic and net contracts during January, it is still too
early to tell how this spring selling season will compare to last
spring's net contracts when the federal home-buyer tax credit was
still available," said President and Chief Executive Ara K.
Hovnanian.
Hovnanian's contracts have plunged recently because of the
expiration of the government's first-time homebuyer tax credit,
which ended last spring after a rush of buyers flocked to secure
it. The company has said a lackluster job market and high
foreclosure activity are "clearly having a [damping] effect on the
housing market."
For the quarter ended Jan. 31, Hovnanian reported a loss of
$64.1 million, or 82 cents a share, from a profit of $236.2
million, or $2.97 a share, a year earlier. The most-recent quarter
included a $1.1 million federal tax benefit and $13.5 million of
land-related charges, while the year-earlier quarter included the
$291.3 million federal tax benefit and $5 million of land-related
charges.
Revenue dropped 21% to $252.6 million.
Analysts polled by Thomson Reuters had most recently forecast a
loss of 61 cents on $245 million in revenue.
Homebuilding gross margin, excluding interest, rose to 16.9%
from 16%.
Net contracts excluding unconsolidated joint ventures fell 13%
to 792 homes. The cancellation rate was 22% from a year-earlier
21%. And the company's contract backlog as of the end of the
quarter was 25% lower than a year earlier.
Shares closed at $3.89 and were inactive after hours. As of the
close, the stock had fallen 1.8% the past year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com