Homebuilder Hovnanian Sees Lower Quarterly Loss

Red Bank, NJ, June 4, 2009--Hovnanian Enterprises Inc. reported a narrower quarterly net loss as the homebuilder benefited from efforts to cut debt and had fewer write-offs and impairments.

Chief Executive Ara Hovnanian said there's been more stability in home prices during the past six weeks. However, he warned that another wave of foreclosures and the expiration of government tax credits for new homebuyers could quell demand again.

The company said its fiscal second-quarter loss narrowed to $118.6 million, or $1.50 a share, from $340.7 million, or $5.29 a share, in the year-ago period. Revenue fell to $398 million from $776.4 million last year.

"We have seen more stability in home prices over the most recent six weeks," Hovnanian said in a statement.

"In spite of these encouraging signs, we remain concerned that the combination of the expiration of the $8,000 federal tax credit in November of this year, the depletion of the state funds allocated for the $10,000 California state tax credit for new home buyers and the potential increase in existing home listings due to another wave of foreclosures as the recent moratoriums on foreclosures have ended could have a dampening effect on our future contract pace," he added.