The article on this company has not been written yet. If you're the first person to write this article, it's a sure thing that you'll be credited as a Top Contributor. For tips on getting started, check out the sample article.

• Centex (CTX)
• D.R. Horton (DHI)
• KB Home (KBH)
• M.D.C. Holdings (MDC)
• NVR (NVR)
• Pulte Homes (PHM)
• Ryland Group (RYL)
• Toll Brothers (TOL)

Hovnanian Enterprises, Inc. engages in homebuilding and financial services businesses in the United States. The company designs, constructs, markets, and sells single-family detached homes, attached town homes and condominiums, mid-rise and high-rise condominiums, urban infill, and active adult homes. It markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active adult buyers, and empty nesters. The company offers homes for sale in 284 communities in 44 markets in 18 states in the United States. It also provides various financial services, including originating mortgages from home buyers, and title insurance activities.

Several signals of a housing industry bottom have already become apparent. Recession has dealt a severe blow to the home-building sector and new construction is far below the rate needed for normal population growth and replacement of older homes. Job losses appear to be moderating, consumer spending is up, if only slightly, and manufacturing and other industrial data have provided encouragement. The massive drop in prices, federal incentives for buyers and relatively low borrowing are making housing more affordable. According to Department of Commerce, sales of new homes rose by the fastest pace in over four years to a seasonally adjusted annual rate of 433,000 units, well above the 390,000 rate economists were expecting. New home sales were up 32% in Northeast where Hovnanian has considerable exposure. Early in December, a release by the National Association of Realtors showed that pending home sales rose for a ninth straight month in October. Similarly, sales of new homes rose in October by 6.2% to a seasonally adjusted annual rate of 430,000 units, much more than the 410,000 units economists had forecast, the Commerce Department reported late in November.

Early in November, the government extended the $8,000 first-time home-buyer tax credit to homes under contract by April 30. Aside from extending the home-buyer tax credit, the new legislation signed into law last week provides tax breaks for home builders, which will result in hundreds of millions of dollars in savings and boost cash levels of companies like Hovnanian. Additionally, the legislation extends the tax loss carryback period to five years from two years for corporate losses booked in 2008 or 2009, which should help strengthen builders' balance sheets. Thanks to the new legislation, Hovnanian Enterprises Inc. anticipates recording a tax benefit in the first quarter of 2010 and receiving a federal income tax cash refund of approximately $250 million to $275 million during its second quarter of fiscal 2010. Hovnanian also said it can now carryback it’s anticipated 2009 net operating loss five years to previously profitable years that were not available to it prior to the new tax legislation.

Hovnanian has taken a number of steps to shore up its balance sheet. In September, the company sought to ease its debt burden by offering to repurchase as much as $759 million of debt that was due to be repaid over the next eight years. To finance the purchases, the company sold up to $785 million of seven-year notes.

The homebuilder aggressively slashed costs in response to worst economic downturn in decades. Staffing levels are down 72% since the peak levels reached in June of ’06. The homebuilder continues to take steps to right-size the company and its staffing levels are down 33% since the beginning of its fiscal year alone.

Though there has been a marked improvement in housing market, turning a profit still remains a challenge for recession-hit housing sector. Early in September, the Red Bank, New Jersey-based company posted a narrower net loss of $168.9 million or $2.16 per share for the third quarter, compared to a net loss of $202.5 million or $2.67 per share in the prior year period. Quarterly revenue slumped to $387.1 million from $716.5 million in the same quarter last year. Analysts, on average, 10 analysts polled by Thomson Reuters expected the company to report a loss of $1.52 per share on revenue of $392.18 million for the third quarter. The number of net contracts for the third quarter of fiscal 2009, excluding unconsolidated joint ventures, declined 9% to 1,442 homes over a year earlier. However, given the 44% reduction in active communities, net contracts per community for the quarter were up 62%. Though the backlog units were down 34% year over year, sequentially the backlog increased from 1,858 homes at the end of the April quarter to 1,978 homes at the end of July quarter.

Competitors

Hovnanian Enterprises' closest competitors include Lennar, D.R. Horton, Pulte Homes etc.

References

http://www.istockanalyst.com/article/viewarticle/articleid/3704160