From the Record:
Hovnanian Enterprises, the state’s largest homebuilder, reported Monday that it lost $131 million in the first quarter of fiscal 2008, more than double its $57 million loss in the same period a year ago.
It was the company’s sixth consecutive quarterly loss. Like other home builders, Hovnanian has been struggling with a deep downturn in demand for housing, following a boom in the first half of this decade.
“Market conditions remain challenging across many of our markets,” said Ara K. Hovnanian, president and chief executive officer. “We continue to focus on reducing our inventories, maximizing cash flow and shrinking our overhead.”
Hovnanian is the developer of a number of communities in North Jersey, including the Four Seasons at Great Notch community in West Paterson, town houses in Hawthorne and Montvale, and several luxury residential buildings along the Hudson River waterfront in Jersey City, West New York and North Bergen.
The company’s first quarter loss came to $2.07 a share, up from 91 cents a share in the year-ago period.
In its 2007 fiscal year, which ended Oct. 31, Hovnanian lost $637.8 million, or $10.11 a share. The largest part of that loss came in the fourth quarter, when the company lost $469.3 million.
Since mid-2006, the company has cut staff, discounted prices and dropped options to buy land.
“They make not make it through 2008,” said Vicki Bryan, a Friendswood, Texas-based senior high- yield analyst for New York-based Gimme Credit LLC. “The only way to generate cash is to sell inventory, and if you’ve cut your prices then you’ve cut the value of your collateral, which is your unsold homes.”
Ara Hovnanian told Bloomberg TV on Feb. 21 that the company had rolled prices back to the levels of 2002 and 2003.