Red Bank-based homebuilder Hovnanian Enterprises ended a 13-quarter losing streak in its latest reporting period, the company announced Tuesday.
Though revenue in the quarter ending on January 31 plunged 14 percent, to $319.6 million, the company managed to rack up a profit of $236.2 million, or $2.97 a share, compared with a year-earlier loss of $178.4 million, or $2.29 a share.
That beat the consensus expectation of Wall Street analysts for a loss of 46 cents a share on revenue of $321 million, the Wall Street Journal reports.
From the Journal:
Hovnanian has been hit harder than most of its peers by the worst industry downturn in generations. Meanwhile, Hovnanian’s heavy debt load is leaving it unable to fully take advantage of lower land prices, potentially leaving it behind when home construction rises. But the company, based in Red Bank, N.J., reported its owned land position increased by about 1,000 lots during the quarter.
Several home builders of late have returned to profitability on the back of tax benefits, with Hovnanian reporting a gain of $291.3 million in the latest quarter. But signs of the housing market’s recovery have been uneven in recent months, although many builders are becoming more optimistic amid low rates and a federal tax credit.
Here’s a prepared comment from Ara K. Hovnanian, company CEO, president and board chairman whose family is the dominant shareholder of the publicly traded comany:
“It is encouraging that we have been able to continue to report improving margins and year-over-year increases in sales absorption rates. Although we remain cautiously optimistic, several headwinds such as persistently high unemployment levels, the expiration of the federal homebuyers tax credit and the threat of more foreclosures continue to hinder a sustainable recovery in the housing market.”