Hovnanian Enterprises (NYSE:HOV) reported results for the first quarter of its 2014 fiscal year today, and the company registered a net loss of $0.17 per common share, a further decline from the loss of $0.08 per common share seen in the first quarter of the 2013 fiscal year.
Revenue at the homebuilder rose by 1.6% to $364 million. However, as a result of increases in its selling, general, and administrative expenses -- which rose 20% from $36.7 million to $44 million -- and corporate general and administrative expenses -- rising from $12.5 million to $16.4 million -- it reported a total net loss of $24.5 million in the first quarter. In total, the adjusted earnings before interest taxes and depreciation at Hovnanian Enterprises fell by 28%, from $16 million to $11.5 millon.
"While our first quarter is always the slowest seasonal period for net contracts, the strong recovery trajectory from the spring selling season of 2013 has softened on a year-over-year basis," said the President, Chairman, and CEO Ara Hovnanian in the company's press release. "Net contracts in the months of December, January and February have not met our expectations."
Mr. Hovnanian continued his remarks by noting that in addition to "the lull in sales momentum, both sales and deliveries were affected by poor weather conditions and deliveries were further affected by shortages in labor and certain materials in some markets that have extended cycle times."
In total, deliveries at Hovnanian decreased by 4.2% year over year, from 1,188 homes in the first quarter of the 2013 fiscal year to 1,138 in the first quarter of this year. In addition, its total number of net contracts fell by 10.6% to 1,202 homes, versus 1,344 in the first quarter of last year. The company did highlight its total contract backlog was up to $904 million and 2,456 homes, which represented increases of 11.4% and 6.7%, respectively.
"We are encouraged by the fact that we have a higher contract backlog, gross margin and community count than we did at the same point in time last year," noted the CEO. "Furthermore, we have taken steps to spur additional sales in the spring selling season, including the launch of Big Deal Days, a national sales campaign during the month of March."
Hovnanian said the company expects stronger results as the year progresses.