Hovanian reports worse than expected quarterly loss
June 6, 2008
New Jersey-based home builder Hovanian reported a quarterly loss nearly double what analysts expected in another sign that the housing market has yet to pull out of its free-fall. With home builders offering buy one, get one free deals, it’s hard to see how those builders who bet big during the run-up won’t continue to feel significant pain on the way down. How many of them are going to fail I think is the real question.
From Bloomberg on Hovanian’s terrible quarter:
Hovnanian Enterprises Inc., New Jersey’s biggest homebuilder, fell as much as 8.4 percent in New York after reporting a quarterly loss almost double what analysts estimated.
Builders across the U.S. are losing money as the industry enters its third year of decline, the worst slump since the 1930s. The five largest U.S. builders have reported a combined $3.4 billion in losses in their most recent quarters as home prices have dropped and banks have curtailed credit.
“We’re seeing in a few locations in New Jersey we’re able to raise prices,” Chief Executive Officer Ara Hovnanian told CNBC today. “In California, too, as hard as it is to believe, and in Houston. I wouldn’t run out and pop the champagne cork just yet but we’re getting there.”
Hovnanian has lost almost two-thirds of its value in the last 12 months, the second-worst performance among 15 companies in the Standard and Poor’s Supercomposite Homebuilding Index.
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