Hovnanian’s head office, as seen from the foot of Maple Avenue.
Red Bank-headquartered Hovnanian Enterprises, one of the nation’s largest homebuilding companies, saw its losses accelerate in the most recent quarter.
The company posted a net loss of $178.4. million in its second fiscal quarter, up from $130.9 million a year ago.
On a per-share basis, the most recent shortfall equated to $2.29, versus last year’s $2.07. Polled analysts had expected a loss of $1.47 per share, the Wall Street Journal reports.
While the homebuilding industry has been hit hard by the collapse in real estate values and the freeze in credit, Hovnanian faces particular challenges, according to the Journal:
decades, but Hovnanian has been plagued by intense concerns about its
ability to generate future profits while it slashes house prices to
generate cash and pay down debt. In the first quarter, its cash
position was bolstered by a government tax refund of $145 million and
now totals $842.6 million.
Amid these concerns, Hovnanian’s stock is subject to some of the
highest short interest in the industry, as traders bet the share price
will keep falling. The builder’s shares have already plunged 99% from a
peak of $73.19 in July 2005.
Shares in Hovnanian closed Tuesday at 62 cents, up 2 cents.
