Please ensure Javascript is enabled for purposes of website accessibility

Hovnanian Net Income Declines in Q3

By Chris Neiger - Sep 9, 2013 at 3:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Its contract backlog, which is a sign of potential future revenue, increased 26.8% to $1.03 billion.

Homebuilder Hovnanian Enterprises (HOV 0.39%) reported its third-quarter earnings today and said its net income declined to $8.5 million, or $0.06 per share, down from $34.7 million, or $0.25 per share, year over year. That's a 76% decline.

Total revenues for the third quarter were up 23.6% to $478.4 million, from $387 million in the same quarter the previous year. In the nine months ending July 31, total revenues increased by 26.2% compared the same period last year.

The company said in a press release that rising home prices mixed with increasing mortgage rates and weak consumer confidence hurt home sales in July and August. But Chairman and CEO Ara K. Hovnanian said in a statement, "We believe we are in a period where consumers are adjusting to current home prices and mortgage rates and remain confident that the combination of pent-up housing demand and the positive long-term demographic trends for housing will drive increased demand for new homes going forward."

Home deliveries in the quarter rose 8.3% to 1,502 homes, while net contracts climbed 1.8% to 1,568 homes. Its contract backlog, which is a sign of potential future revenue, increased 26.8% to $1.03 billion. And the contract cancellation rate declined to 18% from 21%.

Pre-tax income for the third quarter was $11 million "excluding land-related charges and gain on extinguishment of debt" which is compared to a pre-tax loss of $7.4 million in Q3 of 2012. The company expects profitability for the full fiscal 2013 year and strong results in the fourth quarter, excluding expenses related to early retirement of debt. 

-- Material from The Associated Press was used in this report.

Fool contributor Chris Neiger has no position in any stocks mentioned. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hovnanian Enterprises, Inc. Stock Quote
Hovnanian Enterprises, Inc.
$52.20 (0.39%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.