Hovnanian 2Q Loss Widens As Revenue Plunged Amid Lower Orders

Date : 06/07/2011 @ 5:29PM
Source : Dow Jones News
Stock : Hovnanian Enterprises Class A (HOV)
Quote : 2.56  -0.03 (-1.16%) @ 3:59PM

Hovnanian 2Q Loss Widens As Revenue Plunged Amid Lower Orders

Hovnanian Ent (NYSE:HOV)
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Hovnanian Enterprises Inc.'s (HOV) fiscal second-quarter loss widened as revenue fell more than expected amid a drop in orders and bigger land-related charges weighed on the bottom line.

Shares were down 3.4% at $2.26 in recent after-hours trading.

Hovnanian's contracts have plunged in recent quarters from year-earlier results boosted by the government's first-time homebuyer tax credit, which ended last spring after a rush of buyers flocked to secure it. It faces a lackluster job market and high foreclosure activity.

For the quarter ended April 30, Hovnanian reported a loss of $72.7 million, or 69 cents a share, compared with a year-earlier loss of $28.6 million, or 36 cents a share. The latest and prior-year results included $16.9 million and $1.2 million, respectively, in pretax land-related charges.

Revenue plunged 20% to $255.1 million.

Analysts polled by Thomson Reuters most recently predicted a 51-cent loss on $263 million in revenue.

Home-building gross margin fell to 14.8% from 17.3%.

Net contracts including unconsolidated gross ventures fell 17% to 1,166 homes. Contract backlog on the same basis ended the period down 21% from a year earlier by number of homes.

The cancellation rate, excluding unconsolidated joint ventures, rose to 20% from 17%.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com

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