Hovnanian Q3 2022 Earnings Report
Key Takeaways
Hovnanian Enterprises reported an 11.1% increase in total revenues to $767.6 million for the third quarter of fiscal 2022, compared to $690.7 million in the same quarter of the prior year. Income before income taxes increased by 81.1% to $111.9 million. Net income was $82.6 million, or $10.82 per diluted common share, compared to $47.7 million, or $6.72 per diluted common share, in the third quarter of the previous fiscal year.
Total revenues increased 11.1% year-over-year to $767.6 million.
Homebuilding gross margin percentage increased 390 basis points year-over-year to 23.1%.
Income before income taxes increased 81.1% year-over-year to $111.9 million.
Net income increased to $82.6 million, or $10.82 per diluted common share.
Hovnanian
Hovnanian
Hovnanian Revenue by Segment
Forward Guidance
The Company is increasing its gross margin, EBITDA and pretax profit guidance for the full year of fiscal 2022.
Positive Outlook
- Total revenues are expected to be between $2.80 billion and $3.00 billion.
- 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 $310 million and $325 million.
- Adjusted EBITDA is expected to be between $460 million and $475 million.
- Fully diluted earnings per share is expected to be between $32.00 and $33.50.
Challenges Ahead
- Financial guidance assumes no adverse changes in current market conditions, including further deterioration in the supply chain.
- Guidance assumes no 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 $48.51 at July 29, 2022.
- Anticipate reducing senior secured notes by an additional $100 million during the fourth quarter of fiscal 2022.
Revenue & Expenses
Visualization of income flow from segment revenue to net income