Hovnanian Releases 3Q Earnings

Hovananian Enterprises Inc. (NYSE: HOV) released their 3Q results yesterday indicating that sales pace improved modestly throughout the quarter while pricing remains steady. In a report relased by J.P. Morgan, HOV noted that sales per community per month improved modestly during the quarter. Year over year decline improved as well.

Gross margin improvement is still expected in FY11 due to improved community mix as HOV remains active in the land market. 3Q gross margins slipped modestly and the slight decline was due to mix and pointed to stable gross margins through year-end. HOV remains comfortable with the outlook as the company continues to be fairly active in the land market as it purchased 850 lots in 45 new communities during the quarter.

HOV does not see equity raising likely in the near term. They reiterated that it will only raise equity once the company is solidly profitable and "trades off a multiple of earnings." It also noted that given the accommodating debt maturity schedule over the next several years, it does not feel any pressure to raise equity in the near term.

J.P. Morgan maintains a neutral rating on HOV

Hovnanian Enterprises closed yesterday at $3.88

Find the latest business news at FOX Business