AVTI Blog

Homebuilder Hovnanian Reports 2013 2nd Quarter Results

Posted on June 5, 2013 in Industry
Homebuilder Hovnanian Reports 2013 2nd Quarter Results
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Leading national homebuilder Hovnanian Enterprises, Inc. reported results for its fiscal 2013 second quarter results this morning.

For those who don't know, Hovnanian, headquartered in Red Bank, New Jersey, has operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia.

With such a wide reach, it's a good idea for contractors in general to take head of what executives at Hovnanian say in order to get a gauge on current market conditions, particularly from the perspective from a big industry player.

Contractors should find it interesting that Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer, stated today that,

"Throughout the spring selling season, our communities experienced strong demand for new homes. We reported 10.3 net contracts per active selling community for the second quarter of fiscal 2013, which is the highest net contracts per community we have reported for any quarter since the fourth quarter of 2005. We raised home prices in many of our communities across the country, which have more than offset any increases in labor or material costs we have experienced to date. The combination of our improved homebuilding gross margin, improving sales pace and the resultant operating leverage that we have gained on our interest and SG&A costs, further increases our confidence that we should be profitable for fiscal 2013, assuming that market conditions remain stable and excluding any expenses related to early retirement of debt."

Based on Mr. Hovnanian's statement, it seems that the market is still going strong, demand for homes is rising, and they're seeing better margins - all vital indicators for contractors and construction in general. The remaining formula for success for the rest of us will boil down to individual performance and the capacity to deliver quality services at a competitive rate.

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