Homebuilder Hovnanian Enterprises reported its third-quarter earnings today and said its net income declined to $8.5 million, or $0.06 per share, down from $34.7 million, or $0.25 per share, year over year. That's a 76% decline.
Total revenues for the third quarter were up 23.6% to $478.4 million, from $387 million in the same quarter the previous year. In the nine months ending July 31, total revenues increased by 26.2% compared the same period last year.
The company said in a press release that rising home prices mixed with increasing mortgage rates and weak consumer confidence hurt home sales in July and August. But Chairman and CEO Ara K. Hovnanian said in a statement, "We believe we are in a period where consumers are adjusting to current home prices and mortgage rates and remain confident that the combination of pent-up housing demand and the positive long-term demographic trends for housing will drive increased demand for new homes going forward."
Home deliveries in the quarter rose 8.3% to 1,502 homes, while net contracts climbed 1.8% to 1,568 homes. Its contract backlog, which is a sign of potential future revenue, increased 26.8% to $1.03 billion. And the contract cancellation rate declined to 18% from 21%.
Pre-tax income for the third quarter was $11 million "excluding land-related charges and gain on extinguishment of debt" which is compared to a pre-tax loss of $7.4 million in Q3 of 2012. The company expects profitability for the full fiscal 2013 year and strong results in the fourth quarter, excluding expenses related to early retirement of debt.
-- Material from The Associated Press was used in this report.
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