Hovnanian on CNBC: Housing Environment "Difficult"
Homebuilding executive Ara Hovnanian says his industry is not yet getting better, but it's not getting much worse.
Hovnanian Enterprises said on Tuesday its fiscal second quarter loss ballooned more than 10 times from a year earlier, as credit concerns and a weaker economy hit housing sales.
But the company said it had ample liquidity to weather the slowdown and expects to stay cash-flow positive for the full fiscal year.
"The housing environment is difficult," the firm's president and chief executive told CNBC. "All public builders are having challenges. The focus is on liquidity, it's on cash flow, both for our company and the industry...and we just have to weather through it."
For the quarter ended April 30, Hovnanian posted a net loss to common stockholders totaling $340.7 million, or $5.29 per share, compared with a loss of $30.7 million, or 49 cents per share, a year earlier.
Quarterly revenue fell to $776.4 million from $1.1 billion, it said. Analysts expected revenue of $783.3 million, according to Reuters Estimates.
The number of net contracts in the quarter fell 29 percent from a year earlier to 2,226 homes.
The company expects to be cash flow positive for the full fiscal year and forecast its homebuilding cash balance at the end of October would exceed $800 million.
And there are a few signs of progress.
"We're actually seeing in a few locations in New Jersey that we're able to raise prices," Ara Hovnanian said. "There is a location or two, hard as it may be to believe, in California, and...in Houston, we've been able to raise prices, but, again, I'm giving you a few anecdotes. I wouldn't run out and pop the champagne cork yet."
Shares of Hovnanian fell back sharply Wednesday, wiping out much of a gain posted toward the close of the previous session.
Reuters contributed to this article.