NEW YORK ( TheStreet) -- Shares of Hovnanian Enterprises (HOV - Get Report) fell slightly in late trades on Tuesday after the Red Bank, N.J.-based home builder reported much wider loss for its fiscal second quarter vs. last year's performance as gross margins deteriorated and contract backlog declined.
The company, however, said it expects losses to lessen in the next two quarters and forecast an improvement in cash flow as well. For the three months ended April 30, Hovnanian said it lost $$72.7 million, or 69 cents a share, on revenue of $255.1 million. In the same period a year ago, the company lost $28.6 million, or 36 cents a share, on revenue of $318.6 million.
The average estimate of 12 analysts covering the stock was for a loss of 51 cents a share in the April-ended quarter on revenue of $263 million.
The stock was last quoted at $2.21, down 5.5%, on volume of more than 40,000, according to Nasdaq.com. Based on a regular session close at $2.34, the shares had fallen roughly 48% since the start of the year, and Wall Street were unabashedly bearish ahead of the report with seven of the 12 analyst ratings on the stock either underperform (4) or sell (3) and the remainder stuck at hold.Homebuilding gross margin declined to 14.8% in the latest quarter from 17.3% in the same period last year, while contract backlog fell 21% year-over-year to 1,551 homes. "While the spring selling season has been disappointing, there were a couple of bright spots, including a 28% year-over-year increase in net contracts in May, an increase in our community count during the second quarter and a sequential increase in backlog at April 30, 2011," said Ara Hovnanian, the company's chairman, president and CEO, in a statement.