Hovnanian Enterprises, Inc. (HOV), a leading national homebuilder, reported a third-quarter net loss of $7.7 million, or $0.05 per common share, compared to net income $17.1 million, or $0.11 per share, prior year. The pre-tax loss, excluding land-related charges and loss on extinguishment of debt, was $8.9 million compared to net income of $16.1 million in the prior year's third quarter.
On average, five analysts polled by Thomson Reuters expected the company to report a loss per share of $0.01 for the quarter. Analysts' estimates typically exclude special items.
Total revenues were $540.6 million, a decrease of 1.9% compared to $551.0 million, prior year. Analysts expected revenue of $611.95 million for the quarter. Consolidated deliveries were 1,408 homes, a 3.8% decrease compared with 1,464 homes, prior year.
In the third quarter of fiscal 2015, the number of consolidated net contracts increased 13.0% to 1,533 homes compared with 1,357 homes in the prior year's third quarter. The dollar value of consolidated net contracts increased 19.7% to $619.4 million for the three months ended July 31, 2015 compared with $517.3 million during the same quarter a year ago.
Hovnanian expects total revenues for the fourth quarter to be approximately $745 million and pretax profit excluding land related charges, gains or losses on extinguishment of debt and other non-recurring items such as legal settlements are expected to be approximately $22 million. Analysts expect the company to report revenue of $724.70 million.
The company expects total revenues for fiscal 2016 to be between $2.7 billion and $3.1 billion and pretax profit excluding land related charges, gains or losses on extinguishment of debt and other non-recurring items such as legal settlements expected to be between $40 million and $100 million for all of fiscal 2016. Analysts expect the company to report revenue of $2.25 billion.
Ara Hovnanian, CEO, said: "During the third quarter the dollar value of our contract backlog increased 23% year-over-year, while the dollar value of our net contracts increased 20% compared to last year's third quarter, and we also had a 170 basis point sequential improvement in our quarterly gross margin. Assuming no changes in market conditions, we are on track for solid profitability during the fourth quarter of fiscal 2015 and are well positioned for a breakout year from the perspective of deliveries and revenues which should lead to profitability in fiscal 2016."
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