Hovnanian Enterprises Increases Sales but Misses Revenue Estimate

Hovnanian Enterprises (NYSE: HOV  ) reported earnings on March 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 31 (Q1), Hovnanian Enterprises missed estimates on revenues and exceeded expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly. GAAP loss per share dropped.

Gross margins shrank, operating margins grew, net margins grew.

Revenue details
Hovnanian Enterprises logged revenue of $358.2 million. The eight analysts polled by S&P Capital IQ looked for a top line of $384.1 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $269.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.08. The eight earnings estimates compiled by S&P Capital IQ predicted -$0.10 per share. GAAP EPS were -$0.08 for Q1 versus -$0.17 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 14.3%, 310 basis points worse than the prior-year quarter. Operating margin was 0.3%, 20 basis points better than the prior-year quarter. Net margin was -3.2%, 360 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $399.3 million. On the bottom line, the average EPS estimate is -$0.06.

Next year's average estimate for revenue is $1.86 billion. The average EPS estimate is $0.00.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 518 members out of 1,088 rating the stock outperform, and 570 members rating it underperform. Among 285 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 117 give Hovnanian Enterprises a green thumbs-up, and 168 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hovnanian Enterprises is hold, with an average price target of $4.46.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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