Tuesday, December 19, 2006

"hovnanian faces reality"

that the stock performance since they guided down in august to 5$ for the year....... now 2,14% and for 07 1,75$. looks like the stock trades at a 20 pe! maybe even wall street will sometime realize this......

das ist die performance seit hov im august die guidance auf 5$ reduziert hat. nun sind es ganze 2,14$ geworden und für 07 sogar nur 1,75. macht ein kgv von 20!. evtl. realisiert das sogar wall street........

The Company reported net income of $138.9 million for fiscal 2006, or $2.14 (-70%!!!) per fully diluted common share, compared with $469.1 million, or $7.16 per fully diluted common share, in fiscal 2005. Total revenues increased 15% over the prior year, to $6.1 billion. (guidance august hov above 5$!, analysts in august 8$!!)

the Company reported a loss to common stockholders for the fiscal 2006 fourth quarter of $117.9 million, or $1.88 per fully diluted common share, compared to net income available to common stockholders of $165.4 million, or $2.53 per fully diluted common share, for the same period a year ago.

- During fiscal 2006, the Company incurred $336 million of charges related to inventory impairments and land option write-offs, including $315 million in the fourth quarter. ( 94% in q4. now it seems that they face reality or maybe the auditors putting pressuers on them..../ 94% davon 10 q4. endlich sind sie in der realität angekommen bzw. die wirtschaftsprüfer machen gehörig druck.)

- The number of net contracts for fiscal 2006, excluding unconsolidated joint ventures, declined 18.2% to 13,761 contracts. The dollar value of net contracts for fiscal 2006, excluding unconsolidated joint ventures, decreased 17.3% to $4.6 billion, compared to $5.6 billion last year.

- Contract backlog as of October 31, 2006, excluding unconsolidated joint ventures, was 8,496 homes with a sales value of $2.9 billion (down 30%!), compared with a $4.1 billion sales value of contract backlog at the end of fiscal 2005.

- The Company ended the year with no balance outstanding on its $1.5 billion unsecured revolving credit facility and $43.6 million in cash on the balance sheet. The Company's average ratio of net recourse debt to capital for the year was 49.0%.

- Management is providing an initial projection for 2007 earnings of between $1.50 to $2.00 per fully diluted common share on 16,000 to 18,000 home deliveries, including 1,000 to 1,500 deliveries from unconsolidated joint ventures. (is naybody seeing a trend....nut the analysts have had it always wrong ...../ trend zu erkennen....die analysten waren auch nicht besser als das management.......)
EPS TrendsCurrent Qtr
Next Qtr
Current Year
Next Year
Current Estimate 1.050.464.972.71
7 Days Ago 1.050.494.972.84
30 Days Ago 1.070.515.003.13
60 Days Ago 1.070.515.003.18
90 Days Ago 1.080.525.023.29

"We did not anticipate the suddenness or magnitude of the fall in pricing that occurred this year in many of our communities. Our profitability and the pace of new home sales in our markets continues to be adversely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale," Mr. Hovnanian said. The Company's contract cancellation rate for the fourth quarter was 35%, compared with 25% in the fourth quarter of 2005 and a 33% rate reported in the third quarter of fiscal 2006.

"In the fourth quarter, we decided to walk away from $141 million in land deposits and predevelopment costs and took impairment charges of $174 million,"

the Company had 60,714 lots held under option contracts and controlled a total of 94,618 lots, a 22% decline

For the first quarter of fiscal 2007 we anticipate modest earnings of between $0.05 and $0.10 (estimate 0,45)

We anticipate that our average ratio of net recourse debt to capitalization will average close to our target of 50% during fiscal 2007

gross margin including interest 17,7 in vs 24,7 in q4 2005!

interest capitalized up over 100%!!!! to 103 m$

mortage loans held for sale up 33% to 282 m$. (problems in the mbs market!?, maybe charges needed.....)

net contracts in the southeast down 77%!

backlog in the west down over 60%

and take this: crispy from the http://bakersfieldbubble.blogspot.com/ has researched the cash flow from operations in the last 5 quarters ! lots of read inc............

click here!" to see the bloodbath/details.......

update after the call.

disclosure: short hov

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