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Jul 31, 2021
Hovnanian Q3 2021 Earnings Report
Hovnanian Enterprises reported strong Q3 2021 results with increased pretax profit and gross margin.
Key Takeaways
Hovnanian Enterprises reported a strong third quarter with a 10% increase in total revenues to $690.7 million and a significant 281% increase in pretax profit to $62 million. The homebuilding gross margin percentage also increased by 560 basis points year-over-year. The company paid off $111 million of senior secured notes in the third quarter and an additional $70 million early in the fourth quarter.
Total revenues increased by 10% to $690.7 million.
Pretax profit increased by 281% to $62 million.
Homebuilding gross margin percentage increased by 560 basis points to 19.2%.
Consolidated backlog dollars increased by 42% to $1.75 billion.
Hovnanian
Hovnanian
Hovnanian Revenue by Segment
Hovnanian Revenue by Geographic Location
Revenue by Segment
Financial Services Revenue
CapyFin.comRevenue by Geographic Location
Northeast Revenue
CapyFin.comSoutheast Revenue
CapyFin.comWest Revenue
CapyFin.com Forward Guidance
Hovnanian Enterprises provided financial guidance for the fourth quarter and full fiscal year 2021, assuming no adverse changes in current market conditions. They expect total revenues between $830 million and $880 million for Q4 and between $2.80 billion and $2.85 billion for the full year. Adjusted pretax income is expected to be between $60 million and $75 million for Q4 and between $175 million and $190 million for the full year. Adjusted EBITDA is projected to be between $100 million and $115 million for Q4 and between $345 million and $360 million for the full year. The company anticipates community count to grow to roughly 135 by the end of fiscal 2021, with continued growth expected in fiscal 2022.
Positive Outlook
- Total revenues are expected to be between $830 million and $880 million for Q4.
- Adjusted pretax income is expected to be between $60 million and $75 million for Q4.
- Adjusted EBITDA is expected to be between $100 million and $115 million for Q4.
- Total revenues are expected to be between $2.80 billion and $2.85 billion for the full year.
- Community count is expected to grow to roughly 135 by the end of fiscal 2021.
Challenges Ahead
- Guidance assumes no adverse changes in current market conditions.
- Guidance excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements.
- Every $4 increase or decrease in common stock price from the end of the third quarter results in an approximate $1 million increase or decrease of phantom stock expense.
- COVID-19 supply chain disruptions and labor challenges.
- Sales have slowed to a more historically typical sales pace.