Hovnanian Enterprises Earnings: Here’s Why Investors Like These Results

Hovnanian Enterprises Inc. (NYSE:HOV) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 1.01%.

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Hovnanian Enterprises Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 50% to $0.01 in the quarter versus EPS of $0.02 in the year-earlier quarter.

Revenue: Rose 23.79% to $423 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hovnanian Enterprises Inc. reported adjusted EPS income of $0.01 per share. By that measure, the company beat the mean analyst estimate of $-0.05. It beat the average revenue estimate of $408.61 million.

Quoting Management: “Throughout the spring selling season, our communities experienced strong demand for new homes. We reported 10.3 net contracts per active selling community for the second quarter of fiscal 2013, which is the highest net contracts per community we have reported for any quarter since the fourth quarter of 2005,” said Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. “We raised home prices in many of our communities across the country, which have more than offset any increases in labor or material costs we have experienced to date. The combination of our improved homebuilding gross margin, improving sales pace and the resultant operating leverage that we have gained on our interest and SG&A costs, further increases our confidence that we should be profitable for fiscal 2013, assuming that market conditions remain stable and excluding any expenses related to early retirement of debt,” concluded Mr. Hovnanian.

Key Stats (on next page)…

Revenue increased 18.09% from $358.21 million in the previous quarter. EPS increased to $0.01 in the quarter versus EPS of $-0.08 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.04 to a profit $0.07. For the current year, the average estimate has moved up from a profit of $0.03 to a profit of $0.1 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

More Articles About:   , , ,  

More from The Cheat Sheet