Hovnanian Q2 Loss Narrows; Revenues Beat Estimates

(RTTNews) - Home builder Hovnanian Enterprises, Inc. (HOV) on Thursday reported a loss for the second quarter that narrowed from last year on strong revenue growth, partly offset by higher costs and expenses as well as one-time charges.

Analysts expected the company to report a profit for the quarter. However, revenues for the quarter beat analysts' estimates.

The Red Bank, New Jersey-based company's net loss for the second quarter was $8.46 million or $0.06 per share, compared to net loss of $19.56 million or $0.13 per share in the prior-year quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 39.6 percent to $654.72 million from $468.95 million in the same quarter last year, and beat analysts' consensus estimate of $643.06 million.

Total home building revenues grew 39.7 percent from the year-ago period to $637.72 million, while financial services revenues grew 36.4 percent to $17.00 million.

Total costs and expenses for the quarter rose 34.2 percent from last year to $670.98 million.

Home deliveries, including unconsolidated joint ventures, increased 27.8 percent from the year-ago quarter to 1,647 homes.

Contract backlog at the end of the quarter, including unconsolidated joint ventures, stood at $1.58 billion for 3,453 homes, a year-over-year increase of 27.8 percent and 11.7 percent, respectively.

The contract cancellation rate, including unconsolidated joint ventures, for the quarter was 20 percent, compared to 17 percent in the last year's quarter.

Looking ahead to fiscal 2016, the company forecasts total revenues to be between $2.7 billion and $2.9 billion, and adjusted EBITDA between $200 million and $225 million. The Street expects revenues of $2.78 billion for the year.