March 7 (Bloomberg) -- Hovnanian Enterprises Inc., the largest homebuilder in New Jersey, reported a narrower first-quarter loss as it reduced writedowns and increased sales.
The net loss for the three months ended Jan. 31 was $18.3 million, or 17 cents a share, compared with $64.1 million, or 82 cents, a year earlier, the Red Bank, New Jersey-based company said today in a statement. The average estimate of nine analysts in a Bloomberg survey was for a loss of 42 cents a share.
Hovnanian, which has been buying land at distressed prices in an attempt to boost margins, is benefiting from stronger demand for U.S. houses. Its net new orders increased 27 percent in the first quarter from a year earlier, to 1,079 homes, the builder said. Orders jumped 38 percent last month from February 2010.
“The spring selling season is off to a good start in February,” Chief Executive Officer Ara Hovnanian said in the statement. “We are hopeful that the positive trends continue.”
Purchases of new U.S. single-family houses beat analysts’ expectations in January and sales for December and November were revised upward, the Commerce Department said Feb. 24.
Hovnanian’s first-quarter results included $3.3 million in pretax land-related impairments, down from $13.5 million a year earlier. Revenue rose to $269.6 million, up from $252.6 million a year earlier.
Hovnanian’s operations “are unlikely to improve meaningfully over the next several quarters,” Vincent Foley and Cedric Morris, analysts with Barclays Capital in New York, said in a March 5 note to clients. “We are cautious on the company because of its continued lack of profitability, poor liquidity, unsustainable leverage, elevated annual interest burden and aggressive land buying.”
The results were released before the start of regular U.S. trading. Hovnanian fell 5.5 percent to $2.40 yesterday. The shares have lost 38 percent in the 12 months through yesterday, the worst performance in the 13-member Bloomberg Industries homebuilder index, which advanced 7.8 percent.
(Hovnanian Enterprises will hold a conference call today at 11 a.m. New York time. See HOV US <EQUITY> EVT <GO>.)
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