DOW JONES NEWSWIRES Hovnanian Enterprises Inc.'s (HOV) fiscal fourth-quarter net loss narrowed on smaller write-downs as the worst housing downturn in decades showed no signs of bottoming.
Shares fell 7.6% to $2.45 in after-hours trading as the nation's sixth-largest home builder posted its ninth consecutive quarterly loss.
Chief Executive Ara Hovnanian said the company remains focused on cash flow, "even at the expenses of lower margins." It ended the quarter with $838 million in cash, slightly above its fall guidance.
In the current quarter, Hovnanian cut its debt by $42 million through an exchange offer of existing unsecured notes for new secured notes maturing in 2017. The CEO said the company will explore more debt exchanges, purchases and other ways to reduce debt.
For the quarter ended Oct. 31, the family-controlled company reported a net loss of $450.5 million, or $5.79 a share, compared with a net loss of $466.6 million, or $7.42 a share, a year earlier.
The latest results included $319.9 million in write-downs on land and other items, compared with $383 million a year earlier.
Revenue dropped 48% to $721.4 million. Revenue from home sales fell 48% and revenue from land sales and other items dropped 50%.
Analysts' estimates were for a loss of $1.67 a share on revenue of $730.4 million, according to a poll by Thomson Reuters.
Hovnanian said net contracts fell 56% to 1,225 homes from the fourth quarter a year earlier, which included about 1,500 contracts from a "Deal of the Century" price-cutting promotion. Excluding those contracts, net contracts slid 4%.
The average price declined 9.3% to $269,834.
The builder said its contract backlog as of Oct. 31 was 1,907 homes with a sales value of $646.2 billion, down 68% from a year earlier.
The cancellation rate rose to 42% from 40%.
Hovnanian said it reduced its total land position by 24,881 lots from a year earlier. As of Oct. 31, the total land position of 39,903 lots is down 67% from the peak total land position on April 30, 2006.
Builders have taken billions of dollars in write-downs the past several years on their land and have walked away from options to buy land amid deteriorating land and home values.
The worst housing downturn in decades shows no signs of ending, with total housing starts falling 18.9% in November to an annualized pace of 625,000 homes, well below expectations. The downturn has been particularly cruel to builders such as Hovnanian with significant operations in hard-hit Florida and California.
Hovnanian, which operates in 18 states, has stopped giving earnings forecasts because of uncertain housing market conditions.
Earlier this month, rival home builders Toll Brothers Inc. (TOL) posted a narrower fiscal fourth-quarter loss while Beazer Homes USA Inc. (BZH) said its fiscal fourth-quarter loss widened on a write-down of deferred tax assets. Sales continued to plunge.
Hovnanian's stock price, near a 17-year low, has fallen 82% from its 52-week high of $13.50 in March.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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Publié le 16 Décembre 2008 Copyright © 2008 Dowjones