Enter multiple symbols separated by commas

Hovnanian Sees Wider-Than-Expected Loss As Demand Remains Weak

Hovnanian Enterprises said on Friday its second-quarter loss would be bigger than it had previously expected, as the subprime mortgage crisis exacerbated weakness in the moribund home-building sector.

The luxury home builder said it expected to post a loss of about 30 cents per share before certain land-related charges.

It had earlier forecast the loss at 5 cents to 20 cents.

After the charges, the company expects to report a loss of 45 cents to 50 cents per share.

The company expects to incur about $15 million to $20 million of pretax charges for land impairment and write-offs of predevelopment costs and land deposits in the second quarter.

Analysts expect a loss of 16 cents per share.

"The adverse publicity surrounding the subprime market has further damaged home buyers' psychology, resulting in decreased demand and leading to continued use of sales incentives," Hovnanian said in a statement.

The company said net contracts for the quarter fell 21%, and home deliveries sank 30%.

In March and April, consolidated net contracts fell about 30%, compared with a 3% increase in February.

Cancellations were 32% of gross contracts, down from a rate of 36% reported in the first quarter.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Republican presidential candidate Donald Trump speaks while campaigning at the Madison County Republicans "Roundup BBQ" dinner in Winterset, Iowa, June 27, 2015.

    Chicago-area craft brewer, 5 Rabbit Brewer is the latest business to tell Donald Trump he's fired.

  • President Barack Obama shakes hands with Cuba's President Raul Castro as they hold a bilateral meeting during the Summit of the Americas in Panama City April 11, 2015.

    The United States and Cuba will announce plans to open embassies, a key step in normalizing relations after more than 50 years.

  • The Grateful Dead, circa 1980.

    Check out 50 years of highlights from the legendary Grateful Dead, who will perform final shows July Fourth weekend in Chicago.

U.S. Video