Hovnanian Enterprises Q2 revenue falls on demand volatility

Hovnanian Enterprises, Inc. Class A

Hovnanian Enterprises, Inc. Class A

HOV

0.00


Overview

  • US homebuilder's fiscal Q2 revenue declined yr/yr but was within guidance range

  • Company reported a net loss and negative EPS for the quarter

  • Gross margins improved sequentially


Outlook

  • Hovnanian expects Q3 revenue between $650 mln and $750 mln

  • Company sees Q3 adjusted homebuilding gross margin of 14.0% to 15.0%

  • Company expects Q3 adjusted EBITDA of $30 mln to $40 mln

  • Company anticipates improved Q4 volume and gross margins if current conditions persist


Result Drivers

  • SEQUENTIAL GROSS MARGIN IMPROVEMENT - Co said gross margins improved from Q1's trough, reflecting early progress toward normalization

  • DEMAND VOLATILITY - Co said sales momentum was encouraging early in Q2 but geopolitical tensions and inflation concerns caused homebuyer hesitation

  • INVENTORY IMPAIRMENTS - Higher inventory impairments and land option write-offs weighed on profitability


Company press release: ID:nGNX3k4D4h


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

$667.65 mln

$626.40 mln (1 Analyst)

Q2 EPS

-$0.46

-$2.04 (1 Analyst)

Q2 Net Income

-$595,000

Q2 Pretax Profit

$339,000


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