Hovnanian Enterprises posted a net loss of $19.6 million in its second fiscal quarter, more than doubling the $7.9 million loss in the comparable 2014 period, the Red Bank-based homebuilder reported Tuesday.
In the current fiscal year, which began November 1, the company has racked up net losses of $33.9 million, compared to a loss of $32.4 million in the first half of fiscal 2014, Hov reported.
President and CEO Ara Hovnanian said in a statement that the company was “disappointed” with the results.
From the statement:
“As we discussed on our first quarter conference call, we expected our second quarter gross margin to be adversely affected by incentives and concessions on started unsold homes. However, the impact was greater than we anticipated and we are disappointed with our second quarter results,” stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. “Based on the higher gross margin in our April 30th backlog we are confident that our gross margin for the third and fourth quarters of fiscal 2015 will show sequential increases. While we still feel good about our ability to grow the top line during fiscal 2015 and still expect to generate a solid profit during the fourth quarter, we do not expect it to be sufficient to offset earlier quarterly losses.”
“We control enough land today to further grow our community count and remain focused on improving the operating results of some of our weaker divisions. As a result, assuming no changes in current market conditions, we expect fiscal 2016 to be a breakout year for deliveries and revenues, which should lead to a substantial increase in profitability as compared to recent years,” concluded Mr. Hovnanian.