Hovnanian reports wider 3Q loss

Hovnanian Enterprises Inc. said Wednesday its fiscal third-quarter loss more than doubled from a year ago as the homebuilder suffered steep declines in new home contracts and hefty markdowns on land values.

The latest results marked the eighth consecutive quarterly loss for the Red Bank, N.J.-based company, and the top executive said conditions in the housing market are still tough.

"As we continue to compete against record foreclosures, higher than normal levels of resale listings and poor consumer confidence, the housing market remains challenging," Ara Hovnanian, president and chief executive, said in a statement.

The builder lost $202.5 million, or 2.67 a share, for the quarter that ended July 31. That compared with a loss of $80.5 million, or $1.27 a share, in the same period last year.

Hovnanian booked $199.4 million in pretax charges, including $111 million in land-related charges.

Quarterly revenue totaled $716.5 million, down from $1.1 billion a year ago.

The CEO, however, expressed optimism that a recently enacted tax credit for first-time homebuyers will help spur sales in the short term.

Hovnanian has operations in 19 states and was ranked the sixth largest homebuilder for 2007 by Builder magazine.

Hovnanian's net contracts for the third quarter, excluding joint ventures, plunged 38 percent to 1,584 homes versus the same quarter a year ago. The average home price fell nearly 12 percent to $284,427.

Home deliveries totaled 2,185, down 31 percent from the prior-year quarter.

Hovnanian reported a 32 percent cancellation rate for the quarter, compared with 35 percent a year ago.

For the first nine months of the year, the company reported a net loss of $674.1 million, or $9.98 a share. This compared with a loss of $168.5 million, or $2.67 a share, for the same period a year ago.

Revenues in the first nine months of fiscal 2008 were $2.6 billion, down from $3.4 billion in the year-ago period.

The company released its earnings after the close of regular trading. Hovnanian shares rose 36 cents, or nearly 5 percent, to $7.75 on Wednesday, but then slipped 25 cents in aftermarket trading.

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On the Net:

Hovnanian Enterprises Inc.: http://www.khov.com

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