A near stoppage in mortgage lending drove Hovnanian Enterprises to its ninth consecutive quarterly loss in the period ending October 31, the Red Bank-based homebuilder reported yesterday.
According to Bloomberg, the loss was more than three times the deficit that analysts had expected.
For Hovnanian and its shareholders, the upside was that the latest loss, at $450.5 million, or $5.79 a share, was smaller than the $466.6 million, or $7.42 a share, deficit of the comparable year-prior period.
The quarter closed out the company’s fiscal year, which ended with revenues of $3.3 billion, down 31 percent from the $4.8 billion recorded in 2007. The number of net contracts for fiscal 2008, excluding unconsolidated joint ventures, fell 41 percent, to 6,546 homes.
The declines accelerated in the fourth quarter, when net contracts fell 56 percent from levels of a year earlier, when the company offered housing units at deep discounts.
Here’s what company president and CEO Ara K. Hovnanianhad to say about the results:
Since mid-September, the housing market has deteriorated in lock-step with the widening financial crisis and declines in broader economic conditions. Despite the headwinds we faced, we ended the year with $838 million in cash, slightly above the guidance we gave earlier in the fall before conditions worsened. During the first quarter of fiscal 2009, we reduced our debt by $42 million through an exchange offer in which $71 million of existing unsecured notes were exchanged for $29 million of new secured notes maturing in 2017. We will continue to explore additional debt exchanges, purchases and other opportunistic transactions to reduce our debt. As we look forward, our primary focus remains on cash flow, even at the expense of lower margins.
After three years of an unprecedented housing downturn and the deteriorating state of the U.S. economy, we along with other public and private homebuilders, the National Association of Homebuilders, the Business Roundtable and the National Association of Manufacturers, among others, are seeking a housing stimulus package from the Federal Government to assist buyers of both existing and new homes. The housing industry typically leads the U.S. economy into and out of recessions. It is important that a housing stimulus package is passed in order for a turnaround to occur in housing and the U.S. economy overall. More information about the coalition and its initiatives can be found at http://www.fixhousingfirst.com.
The company has scheduled a webcast conference call with analysts for 11a today that can be accessed live through the investor relations section of its website. The discussion will later be available in the audio archive at the site.