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Hovnanian Enterprises trims loss for Q4

Hovnanian Enterprises Inc.'s shares fell 6 percent in aftermarket trading Wednesday following disappointing fourth-quarter earnings.

The builder's results for the quarter ended in October reflected a 1 percent increase in new contracts compared to the year-ago period. Hovnanian also completed 37 percent fewer home sales, which contributed to a 39 percent drop in revenue.

The latest period marks Hovnanian's 13th consecutive quarterly loss, and investors didn't like the latest numbers.

After the close of regular trading, when the builder released its earnings, shares fell 26 cents to $3.97, halving the gains of the day.

The homebuilder said it lost $250.8 million, or $3.21 a share, for the fiscal fourth quarter. That compares with a loss of $450.5 million, or $5.79 a share, the same period last year.

The results included $146.4 million in pretax charges to reflect the declining value of land and other assets.

Revenue fell to $437.4 million from $721.4 million the year before.

Analysts polled by Thomson Reuters were expecting a loss of $1.40 a share on revenue of about $454.1 million.

Hovnanian, based in Red Bank, N.J., has operations in 18 states and was ranked the sixth-largest homebuilder in the country last year by Builder magazine.

To manage through the housing downturn, Hovnanian has slashed its work force by 74 percent since June 2006, cut back on the number of unsold homes it builds and reduced how much land it owns or controls. It's also taken steps to bolster its access to cash and pay off its debt.

However, Hovnanian and other builders have been gearing up for the prospect of improved sales by stepping up land acquisitions. During the third and fourth quarter, the builder snapped up some 4,000 home sites across the country.

New home contracts, excluding joint ventures, totaled 1,238 homes. About 24 percent of buyers backed out of their deals, down from 42 percent in the fourth quarter last year.

For Hovnanian's full fiscal year, the net loss was $716.7 million, or $9.16 a share. For fiscal 2008, the builder lost $1.1 billion, or $16.04 a share.

Total revenue dropped to $1.6 billion versus $3.3 billion.


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