Hovnanian's Stock Jumps After Profit Beats Expectations

Shares of Hovnanian Enterprises Inc. surged 2.1% in premarket trade Thursday, after the homebuilder reported fiscal fourth-quarter earnings exceeded expectations, the first profit beat in four quarters. Earnings for the quarter to Oct. 31 fell to $22.3 million, or 14 cents a share, from $25.5 million, or 16 cents a share, in the same period a year ago. The FactSet consensus for earnings per share was 13 cents. Total revenue rose to $805.1 million from $693.2 million. The FactSet sales consensus was $847 million. The number of net contracts fell 15.4% to 1,299 homes, while the dollar value of net contracts fell 14.5% to $534.3 million. Separately, the company said that after paying off $320 million of debt over the last year, total liquidity was $346.6 million at the end of October. "The debt markets remained closed to companies with our credit ratings and we needed to raise funds to pay off $260 million of maturing public debt," said Chief Executive Ara Hovnanian. "However, we ended the year with a liquidity position of $347 million, allowing us to once again actively seek land investment opportunities, which should ultimately result in community count growth and, assuming no change in market conditions, higher levels of profitability in the future." The stock has soared 35% year to date through Wednesday, while the iShares U.S. Home Construction ETF has gained 5.4% and the S&P 500 has climbed 9.7%.