Red Bank-based national homebuilder Hovnanian Enterprises saw its second-quarter losses increase elevenfold from last year as land valuations and revenues plunged again amid what Dow Jones calls “the worst housing downturn since the Great Depression.”
Still, as the company reported its seventh consecutive net loss, chairman and CEO Ara Hovnanian said the business has “ample liquidity to weather the current downturn,” thanks to a recent refinancing and other measures.
The company said it had a net loss of $340.7 million, or $5.29 per common share, compared with a net loss of $30.7 million, or $0.49 per share, in the second quarter of fiscal 2007. Revenue fell almost 30 percent, to $776 million, from $1.1 billion a year earlier.
The loss followed $251 in write-offs for declining land values and pre-development costs.
The company said net new contracts in the latest quarter were down 29 percent.
Though Wall Street had expected a per-share loss half of what the company reported, investors bid Hovnanian shares up slightly yesterday.
The company plans a conference call for investors at 11a; the call will be webcast via Hovnanian’s website.
Here’s the full text of Ara Hovnanian’s statement:
“Despite a persistently challenging market environment, we successfully achieved positive cash flow one quarter earlier than we originally expected at the outset of the year. Through diligent focus and effort, we reduced our prospective land-purchase and land-development expenditures, which gave us the confidence to project homebuilding cash in excess of $800 million at October 31, 2008. Through the combination of our recent capital market activity and increased cash flow expectations, we now believe that we have ample liquidity to weather the current downturn.
In each of the downturns we have been through during the past 49 years, we emerged as a better and stronger Company. We expect to persevere through the current downturn and we will be in position to thrive again once the housing markets begin to recover.”