Hovnanian Enterprises Increases Sales but Misses Revenue Estimate

Just the facts, Fool.

Seth Jayson
Seth Jayson
Mar 7, 2013 at 12:00AM
Other

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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