Luxury homebuilder Hovnanian Enterprises posted a Q2 loss Thursday, its third consecutive quarterly loss, and is withdrawing its full-year guidance on the "increased uncertainty of housing market conditions." The company posted a net loss of $30.7 million (-$0.49/share) on land impairment and predevelopment write-offs against a profit of $101.0 million ($1.55) in the year-ago quarter. Analysts were expecting a net loss of -$0.48. Excluding the write-offs, Hovnanian had a pretax loss of $7.1 million (-$0.12/share). On May 4, the company forecast a loss of $0.45-0.50 including write-offs and $0.30 excluding them. Total revenues were down 29.4% to $1.1 billion. "We are frustrated to report that the housing market has continued to slip further in many locations in terms of both sales pace and sales prices," said CEO Ara Hovnanian. "We are not confident that we've seen a bottom." The company has withdrawn its March 8 forecast for 2007 EPS of $1.10-1.50 2007 before charges and break-even to $0.40 after charges. Hovnanian shares were off 2.7% to close at $25.26 prior to the earnings announcement Thursday; they fell another percentage point to $25.00 in late trading.
Sources: MarketWatch, Reuters, TheStreet.com, Bloomberg, Wall Street Journal
Commentary: Hovnanian Says Q2 Loss Will Exceed Forecasts • Holding Onto Hovnanian, With Some Trepidation • Hovnanian: Housing Slump Buy
Stocks/ETFs to watch: Hovnanian Enterprises, Inc. (NYSE:HOV). Competitors: DR Horton Inc. (NYSE:DHI), Lennar Corp. (NYSE:LEN), Pulte Homes Inc. (NYSE:PHM). ETFs: streetTRACKS SPDR Homebuilders ETF (NYSEARCA:XHB), iShares Dow Jones US Home Construction (NYSEARCA:ITB)
Conference call transcripts: F1Q07 (Qtr End 1/31/07), Q2 Earnings Call Transcript (later today)
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