Industry News

Builder Hovnanian reports $80.5 million quarterly loss

CEO blames credit tightening, bloated inventory, 'buyer psychology'

Home builder Hovnanian Enterprises reported an after-tax net loss of $80.5 million in the quarter ended July 31 -- a fourth consecutive quarterly loss for the company. The third-quarter loss amounts to a drop of $1.27 per common share, and compares with earnings of $74.4 million and $1.15 per fully diluted common share in third-quarter 2006. Ara K. Hovnanian, company president and CEO, said in a statement that he expects the "challenging environment" in the housing market to persist through most of 2008. "The conditions leading into this housing downturn are different from those we have seen in past slowdowns throughout the 48 years that we have been in the business," Hovnanian stated. But the company is taking similar steps to address this slowdown, he said. "We are concentrating on reducing overhead expenses, and controlling land and land development spending, primarily through the decisions to renegotiate or walk away from options." He added, "Credit tightening in the mortgage mark...