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Apr 30, 2024
Hovnanian Q2 2024 Earnings Report
Hovnanian reported an increase in income before income taxes by more than 50% year-over-year and a 170 basis points year-over-year increase in homebuilding gross margin percentage.
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
Revenue by Segment
Home Sales Revenue
CapyFin.comLand & Other Rev Revenue
CapyFin.comFinancial Services Revenue
CapyFin.comRevenue by Geographic Location
Northeast Revenue
CapyFin.comSoutheast Revenue
CapyFin.comWest Revenue
CapyFin.com 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