Hovnanian Enterprises Shares Gain On Raised FY21 Outlook

Hovnanian Enterprises Shares Gain On Raised FY21 Outlook
  • Hovnanian Enterprises, Inc. HOV reported third-quarter sales growth of 10% year-over-year to $690.68 million.
  • Homebuilding gross margin after the cost of sales interest expense and land charges increased 560 bps to 19.2%.
  • SG&A was $60.3 million, or 8.7% of total revenues, for the quarter compared with $59.9 million, or 9.5% a year ago.
  • EPS improved to $6.72 from $2.16 in 3Q20.
  • Consolidated contracts per community decreased 38.9% to 11.6 contracts per community. The contract cancellation rate for consolidated contracts was 16% versus 18% a year ago.
  • Consolidated deliveries decreased 3.5% to 1,498 homes for the quarter.
  • Adjusted EBITDA increased ~59% Y/Y to $103.08 million, and margin expanded by 460 bps to 14.9%.
  • Consolidated Backlog increased by ~42% Y/Y to $1.75 billion. Total controlled consolidated lots increased 20.4% to 31,002.
  • Q4 Outlook: Hovnanian expects total revenues of $830 million - $880 million and adjusted EBITDA of $100 million - $115 million.
  • FY21 outlook: Hovnanian expects total revenues of $2.80 billion - $2.85 billion (prior outlook $2.65 billion - $2.80 billion) and adjusted EBITDA of $345 million - $360 million (prior $310 million - $350 million).
  • Price Action: HOV shares traded higher by 8.40% at $101.71 on the last check Thursday.

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