Red Bank, N.J.-based Hovnanian Enterprises posted rebounding sales numbers in the fourth quarter ended Oct. 31, buoyed by lots selling at higher prices than the builder’s previous estimates.
The company posted $1.85 billion in annual revenue, a 24.2 percent year-over-year increase and Hovnanian’s largest total since 2008. Net income was also up for the year, rebounding to $31.3 million from a $66.2 million loss in 2012. The company’s stock closed at $5.28 a share on the New York Stock Exchange yesterday, up 29 cents, or 5.8 percent.
Following the housing bust, Hovnanian reduced the estimated value of the land on its books by $61 million, but in the most recent quarter reversed that reduction, helping its income for 2013, the Wall Street Journal reported.
“It is encouraging that the size of those reversals of impairment charges is finally coming down as they work through their impaired inventory,” Vicki Bryan, an analyst with bond-research firm Gimme Credit, told the Journal. “That means, going forward, the improvement that might materialize is likely coming more from actual operating gains.”
Hovnanian’s new contract volume was also on the rise, lifting nearly 13 percent above the figure from one year ago. In a conference call with investors Thursday, CEO Ara Hovnanian attributed some of the sales gains to the firm’s incentives in 20 of its communities, or roughly 10 percent of its portfolio. [WSJ] — Julie Strickland