Hovnanian Q2 2021 Earnings Report
Key Takeaways
Hovnanian Enterprises reported a 30.6% increase in total revenues to $703.2 million for the second quarter of fiscal 2021, with homebuilding gross margin percentage increasing by 360 basis points to 18.1%. The company's net income, including the benefit of a valuation allowance reduction, was $488.7 million, or $69.65 per diluted common share. The dollar value of consolidated contract backlog increased 85.2% to $1.77 billion.
Total revenues increased 30.6% to $703.2 million.
Homebuilding gross margin percentage increased 360 basis points to 18.1%.
Consolidated contracts per community increased 61.9% to 18.3 contracts per community.
Dollar value of consolidated contract backlog increased 85.2% to $1.77 billion.
Hovnanian
Hovnanian
Hovnanian Revenue by Geographic Location
Forward Guidance
For the third quarter of fiscal 2021, total revenues are expected to be between $700 million and $750 million, adjusted pretax income is expected to be between $35 million and $45 million and adjusted EBITDA is expected to be between $80 million and $90 million. For all of fiscal 2021, total revenues are expected to be between $2.65 billion and $2.80 billion; adjusted pretax income to be between $150 million and $170 million and adjusted EBITDA to be between $310 million and $350 million.
Positive Outlook
- Total revenues are expected to be between $700 million and $750 million for Q3 2021.
- Adjusted pretax income is expected to be between $35 million and $45 million for Q3 2021.
- Adjusted EBITDA is expected to be between $80 million and $90 million for Q3 2021.
- Total revenues are expected to be between $2.65 billion and $2.80 billion for fiscal year 2021.
- Adjusted pretax income is expected to be between $150 million and $170 million for fiscal year 2021.
Challenges Ahead
- Financial guidance for both the third quarter and full year for fiscal 2021 assumes no adverse changes in current market conditions.
- Financial guidance excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements from the closing price of $132.59 at April 30, 2021.
- Every $4 increase or decrease in common stock price from the end of the second quarter, results in an approximate $1 million increase or decrease, respectively, of phantom stock expense.
- The Company cannot provide a reconciliation between its non-GAAP projections and the most directly comparable GAAP measures without unreasonable efforts.
- These items are uncertain, depend on various factors and could have a material impact on GAAP reported results.
Revenue & Expenses
Visualization of income flow from segment revenue to net income