Correction to reflect CEO's name
RED HOOK, N.J. (
was tanking on Thursday, a day after an earnings report was bleaker than a skeptical Wall Street even expected.
Hovnanian shares were lately down 7.3% to $3.92 on fears that the road to recovery could be a long and winding one for the homebuilder.
It was a 24-hour agony and ecstasy period for
Hovnanian, which rose like all homebuilders on Wednesday after the positive data on housing starts and building permits for November, but was slapped by the market once its worse-than-expected earnings were released.
Hovnanian Enterprises would come in with a loss was not in question. The only issue was how much less of a loss Hovnanian would show over previous quarters, and the homebuilder missed the Street estimate by a wide margin.
During a conference call for analysts a day after the earnings release, Hovnanian CEO Ara Hovnanian indicated that the management outlook remained poor for the foreseeable future. Hovnanian said the homebuilder will not return to profitability until after 2010, an opinion that most analysts already held even before Wednesday's earnings disappointment.
One day after the positive housing starts and building permit data, the sector suffered a broad selloff on Hovnanian's grim report. Of all the major public homebuilders, only
managed to stay in positive territory in afternoon trading, clinging to a 1% gain.
Hovnanian said it lost $250.8 million, or $3.21 a share, for the fiscal fourth quarter. That compares with a loss of $450.5 million, or $5.79 a share, the same period last year. The results included $146.4 million in pretax charges to reflect the declining value of land and other assets. Analysts' estimates had been in a range of a loss of $1.40-$1.49 a share.
Hovnanian's revenue fell to $437.4 million from $721.4 million the year before.
-- Reported by Eric Rosenbaum in New York.
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