Red Bank, NJ, May 2, 2006--Home builder Hovnanian Enterprises Inc. slashed its second-quarter and full-year outlook on Monday, citing slowing sales, production delays and increased use of concessions and incentives.
Shares of Hovnanian tumbled $1.77, or 4.6 percent, to $37.01 in the after-hours session. They closed Monday's regular session down 99 cents, or 2.5 percent, at $38.78 on the New York Stock Exchange.
The company now expects second-quarter earnings of $1.40 to $1.50 per share, down from previous projections for $1.55 to $1.80 per share. Analysts polled by Thomson Financial currently expect the company to earn, on average, $1.68 per share.
For the full year, the company lowered its earnings view to $7.20 to $7.40 per share, down from previous guidance of $8.05 to $8.40 per share. Analysts currently expect an average of $7.87 per share.
"Our anticipated results for our second quarter and the remainder of fiscal 2006 reflect smaller year-over-year increases in earnings than we had anticipated, primarily due to continuing production delays in several markets that have postponed deliveries, a slower recent sales pace, higher cancellation rates, more pronounced use of concessions and incentives, and material price increases," Ara Hovnanian, president and chief executive, said in a prepared statement.
