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Apr 30, 2022
Hovnanian Q2 2022 Earnings Report
Hovnanian Enterprises reported an increase in pretax profit and homebuilding gross margin, while maintaining consistent total revenues year-over-year.
Key Takeaways
Hovnanian Enterprises reported a 161% year-over-year increase in pretax profit for the second quarter of fiscal 2022. The homebuilding gross margin percentage increased by 520 basis points year-over-year, and the consolidated contract dollars increased by 5%. The company also early retired $100 million of senior secured notes and total revenues were $702.5 million.
Pretax profit increased by 161% year-over-year.
Homebuilding gross margin percentage increased by 520 basis points year-over-year.
Consolidated contract dollars increased by 5%.
Early retirement of $100 million of senior secured notes.
Hovnanian
Hovnanian
Hovnanian Revenue by Segment
Revenue by Segment
Home Sales Revenue
CapyFin.com Forward Guidance
The Company provided financial guidance for the third quarter of 2022. Total revenues are expected to be between $780 million and $830 million, gross margin, before cost of sales interest expense and land charges, is expected to be between 24.0% and 26.0% and adjusted pretax income is expected to be between $70 million and $85 million.
Positive Outlook
- Total revenues are expected to be between $780 million and $830 million.
- Gross margin, before cost of sales interest expense and land charges, is expected to be between 24.0% and 26.0%.
- Adjusted pretax income is expected to be between $70 million and $85 million.
- Continue to focus on leverage levels.
- Anticipate reducing senior secured notes by at least an additional $100 million during the second half of fiscal 2022.
Challenges Ahead
- Financial guidance assumes no adverse changes in current market conditions.
- Guidance excludes further deterioration in the supply chain.
- Guidance excludes material increase in mortgage rates.
- Guidance excludes increased inflation.
- Guidance excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements from the closing price of $46.02 at April 29, 2022.