Second-quarter earnings shot up 34% at
, surpassing estimates, and the luxury homebuilder vowed that rising interest rates wouldn't keep it from beating forecasts for the full year.
Red Bank, N.J.,-based Hovnanian earned $70.5 million, or $1.06 a share, in the latest quarter, compared with earnings of $52.6 million, or 80 cents a share, a year earlier. Revenue was $918.8 million in the three months ended April 30, compared with $679.8 million last year.
Analysts surveyed by Thomson First Call were forecasting earnings of $1.03 a share on revenue of $905.9 million in the most recent quarter. The stock was recently up 56 cents, or 1.6%, to $36.25 on the Instinet premarket session.
Hovnanian said its net contracts rose 45% in the second quarter to 4,911, while second-quarter deliveries totaled 3,372 homes worth $909.4 million, compared with 2,507 homes worth $668.7 million in the year-ago period. Contract backlog rose to 8,093 homes from 5,318 homes in last year's second quarter.
On the basis of those results, the company raised full-year guidance to $5 a share and evinced little concern macroeconomic factors would crimp its earnings power.
"We can't recall a time when the national economy was strengthening, as it is now, and housing didn't continue to perform well, despite a rising rate environment," Hovnanian said. "Our market share gains, along with steady underlying demand for housing based on demographics and increasing constraints on the availability of new homes, continue to drive a healthy level of new-home sales in most of our markets."
Analysts had been looking for earnings of $4.99 in the full year.