Hovnanian Enterprises Inc. on Friday reported better-than-expected profit during its latest quarter, though the New Jersey-based home builder reported a surprise slip in sales.

Shares added 8.8% in premarket trading.

Hovnanian is in a liquidity crunch as it faces $467 million in debt coming due through 2017.

Hovnanian said it paid off $60.8 million of debt that matured on Oct. 15, leaving the company with $250.1 million in liquidity at the end of the fiscal fourth quarter compared with $309.2 a year earlier.

On Thursday, Hovnanian said Blackstone Group LP's credit arm agreed to add $175 million to their land-banking agreement. Under the agreement, funds managed by GSO Capital Parnters, the Blackstone arm, buy land parcels from Hovnanian and then sell the finished lots back to the home builder.

Hovnanian said the move gives the company additional liquidity.

Hovnanian caters almost equally to buyers in the first-time, move-up and luxury segments. Despite gradual recovery in the housing market, Hovnanian's orders recently have fallen short of most of its peers. The company has also been hurt by the impact of incentives and concessions on homes built on speculation.

In the latest quarter, home-building margin, excluding certain items, fell to 18% from 19.3% a year earlier.

Deliveries slid 6.5% to 1,792 homes, as the company faced delays in delivering homes related to longer cycle times in some markets.

Backlog was up 33% from a year earlier to 3,112 homes.

Revenue ticked down to $693.2 million from $698.4 million a year earlier. The company had projected revenue of roughly $745 million.

In all, Hovnanian reported earnings of $25.5 million, or 16 cents a share, down from $322.5 million, or $1.95 a share, a year earlier. Analysts had expected a profit of 9 cents a share, according to Thomson Reuters.

The prior-year period was lifted by a $286.5 million income-tax benefit.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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(END) Dow Jones Newswires

December 04, 2015 10:15 ET (15:15 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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