Hovnanian Q2 2024 Earnings Report
Key Takeaways
Hovnanian Enterprises reported fiscal 2024 second quarter results with total revenues of $708.4 million, a net income of $50.8 million, and income before income taxes increasing by 50.4% year-over-year. The company's performance was driven by resilient demand for new homes despite a rising mortgage rate environment.
Income before income taxes increased more than 50% year-over-year.
Homebuilding gross margin percentage increased 170 basis points year-over-year.
Net contracts per community increased year-over-year to 13.9.
Land and land development spending was $230.5 million.
Hovnanian
Hovnanian
Hovnanian Revenue by Segment
Hovnanian Revenue by Geographic Location
Forward Guidance
For the third quarter of fiscal 2024, Hovnanian expects total revenues between $675 million and $775 million, adjusted homebuilding gross margin between 21.5% and 23.5%, adjusted income before income taxes between $65 million and $75 million, and adjusted EBITDA between $97 million and $107 million.
Positive Outlook
- Total revenues are expected to be between $675 million and $775 million.
- Adjusted homebuilding gross margin is expected to be between 21.5% and 23.5%.
- Adjusted income before income taxes is expected to be between $65 million and $75 million.
- Adjusted EBITDA is expected to be between $97 million and $107 million.
- Common book value per share to increase by 45% at October 31, 2024 to approximately $106 per share.
Challenges Ahead
- Financial guidance assumes no adverse changes in current market conditions.
- Guidance excludes further deterioration in supply chain.
- Guidance excludes material increases in mortgage rates.
- Guidance excludes increases in inflation or cancellation rates.
- Guidance excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements from the closing price of $147.83 on April 30, 2024.
Revenue & Expenses
Visualization of income flow from segment revenue to net income