What: Shares of Hovnanian Enterprises (NYSE:HOV), a company that designs, builds, and sells residential homes in the U.S., fell as much as 16.1% on Thursday after it reported an unexpected quarterly loss. Shares are down about 12% at the time of this writing.
So what: Analysts, on average, were expecting Hovnanian to report a profit of about $0.02 per share. However, the company reported a second-quarter loss of $8.5 million, or $0.06 per share. This compares to a loss of $19.6 million, or $0.13 per share, in the year-ago quarter.
Adjusted for asset impairment costs, Hovnanian's loss per share was $0.02 -- still lower than the consensus analyst estimate for the quarter.
The company did, however, report higher-than-expected revenue. Second-quarter revenue was about $655 million, up 40% from the year-ago quarter. Analysts were expecting revenue of about $643 million.
What now: While Hovnanian CEO Ara Hovnanian acknowledged it was "discouraging to report a loss for the first half of fiscal 2016," he reminded investors it is a "significantly reduced loss."
Further, Hovnanian is confident about the future.
"We are certain that we are taking the correct steps that will best position our company for future success," the CEO said.
Hovnanian remains focused on "deleveraging [its] balance sheet and maximizing profitability rather than on additional growth."
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