Hovnanian's Stock Rallies After Sales, Deliveries Beat Expectations

Hovnanian Enterprises' stock jumped 5.6% in morning trade Wednesday, after the home builder reported fiscal fourth-quarter sales and deliveries that were well above expectations. For the quarter ended Oct. 31, net income rose to $322.5 million, or $1.95 a share, from $32.8 million, or 21 cents a share, in the year-earlier period. The latest quarter's results include a $285.1 million non-cash tax benefit. Revenue rose 18% to $698.4 million and deliveries increased 5.5% to 1,916 homes, topping the FactSet consensus analyst estimates of $646 million and 1,735, respectively. "We continue to believe the housing industry remains in the early stages of a recovery," said Chief Executive Ara Hovnanian. "Improving demographic and employment trends should result in a more robust housing market that returns both national housing starts and sales pace per community to normalized levels." The stock has dropped 36% so far this year, compared with an 11% rise in the S&P 500.