Hovnanian Enterprises Earnings: Here’s Why Shares are Up Now

Hovnanian Enterprises Inc. (NYSE:HOV) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.39%.

Hovnanian Enterprises Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 76% to $0.06 in the quarter versus EPS of $0.25 in the year-earlier quarter.

Revenue: Rose 23.61% to $478.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hovnanian Enterprises Inc. reported adjusted EPS income of $0.06 per share. By that measure, the company missed the mean analyst estimate of $0.07. It missed the average revenue estimate of $504.7 million.

Quoting Management: “For the third quarter of 2013, we reported net income of $8 million. This is the second consecutive quarter that we reported net income and just about gets us to breakeven for the first 9 months of 2013. Given both the number of homes in our contract backlog and the gross margins on these homes, we expect to report much stronger results for our fourth quarter, assuming market conditions remain stable, and we are reiterating that our guidance, that we expect to be profitable for all of fiscal ’13.” said Ara Hovnanian, Chairman, President and Chief Executive Officer.

Key Stats (on next page)…

Revenue increased 13.1% from $423 million in the previous quarter. EPS increased 500% from $0.01 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.16 to a profit $0.15. For the current year, the average estimate has moved up from a profit of $0.11 to a profit of $0.16 over the last ninety days.

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