Hovnanian Misses Street; Shares Drop

Homebuilder Hovnanian dissappoints with a wider-than-expected loss, and its stock falls sharply.
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RED BANK, N.J. (TheStreet) -- Hovnanian (HOV) - Get Report shares lost more than 14% Thursday morning, following the homebuilder's dismal third-quarter report, issued after the closing bell Wednesday.

The results were perhaps a bit sobering for investors after a series of economic data points had suggested some improvement in the housing market.

As for Hovnanian, the expectations miss has pressured the company's stock. Before the open of the regular session Wednesday, the shares were changing hands at $3.99, down 66 cents, or 14.2%, on heavy volume.

In the just-ended fiscal third quarter, Hovnanian said it lost $2.16 a share, far more red ink than Wall Street analysts were anticipating. On average, they had put Hovnanian's quarterly deficit at $1.52 a share.

Still, that was a narrower loss than the comparable period a year ago, when the company's bottom line showed a loss of $203 million, or $2.67 a share.

The company's revenue in the quarter plunged 45% to $387 million.

Sector peer

Toll Brothers

(TOL) - Get Report

said last weak that it saw "signs of optimism" in the homebuilding business even as it bled losses and recorded a 42% decline in revenue.

Earlier in the month, homebuilder

D.R. Horton

(DHI) - Get Report

said its quarterly loss narrowed as it took a lesser amount in charges against the falling values of its land and unsold homes. It also saw new home orders jump 22%.

Pulte Homes

(PHM) - Get Report

, meanwhile, posted a wider loss of $189.5 million, or 74 cents a share, missing analysts' forecast.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.