The 10-second takeaway
For the quarter ended April 30 (Q2), Hovnanian Enterprises beat expectations on revenue and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share increased.
Gross margin contracted, operating margin improved, and net margin increased.
Hovnanian Enterprises booked revenue of $341.7 million. The seven analysts polled by S&P Capital IQ expected to see a top line of $310.4 million on the same basis. GAAP reported sales were 34% higher than the prior-year quarter's $255.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.14. The six earnings estimates compiled by S&P Capital IQ predicted -$0.29 per share. GAAP EPS were $0.02 for Q2 against -$0.69 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 14.1%, 140 basis points worse than the prior-year quarter. Operating margin was 0.0%, 510 basis points better than the prior-year quarter. Net margin was 0.5%, 2,900 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $371.8 million. On the bottom line, the average EPS estimate is -$0.21.
Next year's average estimate for revenue is $1.35 billion. The average EPS estimate is -$0.90.
The stock has a one-star rating (out of five) at Motley Fool CAPS. Among 306 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give Hovnanian Enterprises a green thumbs-up, and 212 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 $1.91.
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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. 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.