Why Hovnanian Enterprises (HOV) Shares Are Sliding Today - Hovnanian Enterprises (NYSE:HOV)

Homebuilder Hovnanian Enterprises Inc HOV reported Q2 FY23 revenue of $703.7 million, slightly up from $702.5 million a year ago.
Sale of home revenues, including domestic unconsolidated joint ventures, declined 2.8% Y/Y to $751.4 million (1,346 homes).
As of April 30, 2023, the contract backlog fell 35.7% Y/Y to $1.32 billion.
Homebuilding gross margin percentage, after the cost of sales interest expense and land charges, contracted to 17.8% from 23.3% in the prior year.
Adjusted EBITDA declined to $86.7 million from $123.7 million a year ago.
EPS for the quarter declined significantly to $4.47 from $8.39 a year earlier.
The company held $341 million in cash and equivalents. As of April 30, 2023, the community count rose 11.8% to 114 communities.
Outlook: For Q3 FY23, the company expects revenues of $630 million-$730 million and adjusted EBITDA of $85 million-$95 million.
For FY23, HOV projects total revenues of $2.50 billion-$2.65 billion, adjusted EBITDA of $320 million-$340 million, and EPS of $17.00-$20.00.
At the midpoint of the guidance, the company expects common shareholders' equity to increase by around 60% by October 31, 2023, to $58.50 per share.
"As home demand increased, we raised home prices in approximately 69% of our communities during the second quarter of fiscal 2023. Our liquidity position is strong, and we remain focused on both increasing our land supply and strengthening our balance sheet. In May, we redeemed $100 million of debt in advance of its maturity. We are encouraged by the uptick in sales and believe that the outlook for housing demand will remain strong over the long term," said Ara K. Hovnanian, Chairman of the Board, President, and CEO.
Price Action: HOV shares traded lower by 14% at $80.65 on the last check Wednesday.

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Why Hovnanian Enterprises Shares Are Sliding Today

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