Hovnanian posts third-quarter loss
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CHICAGO, Sept 6 (Reuters) - Upscale home builder Hovnanian Enterprises Inc (HOV.N) reported a quarterly loss on Thursday, a reflection of the deteriorating U.S. home market, but its shares rose as the results met Wall Street expectations.
For the quarter ended July 31, Hovnanian reported a loss of $80.5 million, or $1.27 a share, compared with a profit of $74.4 million, or $1.15 a share a year earlier.
Sales tumbled 27 percent to $1.1 billion. Analysts, on average, expected the Red Bank, New Jersey-based company to report a loss of $1.27 a share on sales of $1.12 billion, according to Reuters Estimates.
The results include a charge of $108.6 million related to land impairments and write-offs, within the $90 million to $110 million range it had forecast in August.
As housing demand dwindled, land values have fallen and developers have slowed operations to avoid being saddled with homes they cannot sell.
On Aug. 13, Hovnanian said it closed on the sale of 31 percent fewer homes in the third quarter ended July 31 than it did a year earlier. Net new contracts for homes fell 24 percent, excluding unconsolidated joint ventures.
The third-quarter cancellation rate was 35 percent, compared with 33 percent a year earlier.
After several torrid years of growth, the U.S. housing market has seen demand steeply drop. Higher interest rates for home buyers who bought at low introductory rates and a credit crunch spurred by rising defaults have swelled the supply of homes for sale.
In after-hours trading, shares were up 48 cents, or 4.2 percent, after closing at $11.37, more than retracing a 3.7 percent loss during the regular session on the New York Stock Exchange.
(Reporting by James B. Kelleher and Ilaina Jonas)
((Editing by Gary Hill; Reuters Messaging: james.kelleher.reuters.com@reuters.net; email: james.kelleher@reuters.com; +1 312 408 8130)) Keywords: andre HOVNANIAN RESULTS/
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