Wednesday, December 17, 2008

Homebuilder Hovnanian loses another $450 million

From CNN Money:
Hovnanian Enterprises Inc. said Tuesday its fiscal fourth-quarter loss narrowed slightly from a year ago, but the homebuilder continued to struggle against sharp declines in new home contracts and falling land values.

After paying preferred stock dividends, the builder lost $450.5 million, or $5.79 a share, for the quarter that ended Oct. 31. That compares with a loss of $469.3 million, or $7.42 a share, in the same period last year, and marked the ninth quarterly loss in a row.

The results included $456.5 million in pretax charges, including $319.9 million in land-related charges.

Quarterly revenue fell 48% to $721.4 million.

"Since mid-September, the housing market has deteriorated in lockstep with the widening financial crisis and declines in broader economic conditions," Ara Hovnanian, president and chief executive, said in a statement.

Underscoring that point, the Commerce Department reported Tuesday that construction of single-family homes fell last month by almost 19%, the biggest drop in a quarter-century.
Wow! The company lost $450 million in the quarter, and looking at their balance sheet, their shareholder equity is $777.9 million. At that rate, perhaps they should just cease operations and give shareholders what money they can now, rather than try to survive two more quarters.

1 comment:

  1. No really; suburban sprawl is dead.

    The builders are dead, and other mechanisms which made sprawl possible are dead. (That includes the the auto industry as we used to know it.)

    Look for contractions in weak sprawling areas. Strip malls will be abandoned, and swaths of vacant homes will be stripped of useful materials and/or recycled as low income housing.