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Hovnanian
🇺🇸 NYSE:HOV
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Jul 31, 2020

Hovnanian Q3 2020 Earnings Report

Hovnanian reported increased total revenues and pretax income year-over-year.

Key Takeaways

Hovnanian Enterprises reported a 30.3% increase in total revenues, reaching $628.1 million, and a significant improvement in pretax income to $16.2 million compared to a loss of $7.1 million in the same quarter of the prior year. The company also saw a 47% year-over-year improvement in consolidated contracts. These results reflect a strong recovery in home demand and effective management strategies in response to the COVID-19 pandemic.

Total revenues increased by 30.3% to $628.1 million compared to the prior year.

Pretax income improved by $23 million year-over-year, reaching $16.2 million.

Consolidated contracts increased by 47% year-over-year.

EBITDA increased 88% to $66.5 million.

Total Revenue
$628M
Previous year: $482M
+30.3%
EPS
$2.16
Previous year: -$1.27
-270.1%
Homebuilding Gross Margin
13.6%
Contracts per Community
19
Home Deliveries
1.55K
Gross Profit
$93.8M
Previous year: $70.7M
+32.6%
Free Cash Flow
$112M
Previous year: -$60.4M
-286.1%
Total Assets
$1.81B
Previous year: $1.8B
+0.6%

Hovnanian

Hovnanian

Hovnanian Revenue by Segment

Hovnanian Revenue by Geographic Location

Forward Guidance

Hovnanian anticipates meaningful improvements in revenues, EBITDA, and profitability during fiscal year 2021, assuming no material changes in market conditions. The company has pivoted to increasing home prices in virtually all markets since June, which is expected to offset potential cost increases and improve gross margins. The company controls virtually all the lots needed to meet the growth in deliveries expected next year.

Positive Outlook

  • Expects meaningful improvements in revenues during fiscal 2021.
  • Anticipates improvements in EBITDA during fiscal 2021.
  • Projects improvements in profitability during fiscal 2021.
  • Home price increases should offset potential cost increases.
  • Controls virtually all lots needed for expected delivery growth next year.

Challenges Ahead

  • Broader economic uncertainties related to the COVID-19 pandemic.
  • Potential cost increases in the future.
  • Discounts adversely impacted gross margin in Q3 2020.
  • Depends on no material changes in market conditions to achieve improvements.
  • The overall demand for new homes continues to be robust due to historically low mortgage rates, a nationwide low supply of existing homes and a strong consumer desire for more indoor and outdoor space.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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