Hovnanian Enterprises Inc., the largest homebuilder in New Jersey, said its second-quarter loss more than doubled as a lack of demand for new houses caused revenue to tumble 20 percent.
The net loss for the three months ended April 30 widened to $72.7 million, or 69 cents a share, from $28.6 million, or 36 cents, a year earlier, the Red Bank-based company said in a statement yesterday. The average estimate of nine analysts in a Bloomberg survey was for a loss of 55 cents a share.
Hovnanian, which specializes in building communities of single-family homes, is buying land at distressed prices in an effort to boost margins as the housing market languishes. U.S. homebuilders are struggling with weak demand as unemployment hovers around 9 percent and foreclosures drag down prices of previously owned houses.
“The further the recovery is pushed out, the more difficult it is for companies like Hovnanian that are in the weakest financial shape,” said Vicki Bryan, an analyst for debt research firm Gimme Credit LLC in New York.
U.S. new-home sales are near record lows. Newly built properties sold at an annual pace of 323,000 in April, according to the Commerce Department. They reached a rate of 278,000 in February, matching the pace in August as the lowest in data going back to 1963.
Home Orders, Sales
Hovnanian’s second-quarter revenue declined to $255.1 million from $318.6 million a year earlier. Net orders dropped 17 percent to 1,166 homes.
The loss was Hovnanian’s 18th in the past 19 quarters. The only profit, in the three months ended January 2010, was the result of a federal tax break.
The company expects narrower losses in the next two quarters, Chief Executive Officer Ara Hovnanian said in yesterday’s statement.
“We remain confident that we have the liquidity to weather the remainder of this downturn, and will continue to position ourselves in preparation for the inevitable housing recovery,” he said.
The report was released after the close of regular U.S. trading. Hovnanian has lost 43 percent this year for the biggest decline in Bloomberg’s U.S. homebuilder index, which is down 13 percent.