Hovnanian Enterprises, Inc. (HOV) delivered its fiscal 2013 first quarter report on operations Wednesday that showed the homebuilder’s revenues were up 33 percent and net losses narrowed compared to the year earlier quarter as the U.S. housing market continues to recover.
The Red Bank, New Jersey-based company reported quarterly revenue of $358.2 million in the three-month period ended January 31, 2013, up from $269.6 million during the 2012 fiscal first quarter. Hovnanian recorded a net loss for the first quarter of $11.3 million, of 8 cents per share, compared to a net loss of $18.3 million, or 17 cents per share, in the year earlier quarter. The latest quarterly loss included a $9.7 million federal tax benefit, while the year prior quarter included a $20.1 million net benefit from gains on extinguishment of debt that were partially offset by expenses related to a debt exchange offer.
Wall Street analysts were expecting Hovnanian to report a net loss of 10 cents on revenue of $381 million.
Deliveries in the most recent quarter, including unconsolidated joint ventures, were 1,188 homes, up 17.4 percent compared with 1,012 homes in the 2012 first quarter.
At the end of the quarter, the company had a contract backlog of $8112.1 million for 2,301 homes, representing a 40.4 percent larger dollar backlog than the comparable 2012 quarter.
The company said that, during February of 2013, the dollar value of net contracts and the number of net contracts, including unconsolidated joint ventures, increased 31.3% and 17.8%, respectively, compared to February 2012.
"Provided there are no adverse changes in current market conditions, we anticipate our deliveries, revenues and gross margin will increase in fiscal 2013 compared with fiscal 2012 with the greatest improvement in these metrics expected to occur during the second half of the fiscal year," said Ara K. Hovnanian, chairman, president and CEO at Hovnanian.
He added, “…we are optimistic that the recent increases in net contracts we have reported will continue and could lead to our best spring selling season in years.”
Investors will weren’t rejoicing the net loss and the lower-than-expected revenue, despite the signs of improvement.
Shares are trading down by about 6 percent at $5.70 halfway through Wednesday’s session. Shares of homebuilders in general have been stellar performers over the past year with shares of HOV appreciating by about 140 percent in the past 52 weeks.
In the same timeframe, shares of rival Toll Brothers, Inc. (TOL) are up 61 percent, PulteGroup, Inc. (PHM) shares have advanced 150 percent and Lennar Corp. (LEN) has climbed 86 percent.
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