New Loss for Home Builder

6 (AP) — The luxury-home builder Hovnanian Enterprises reported its fourth consecutive quarterly loss on Thursday, citing continuing problems of credit availability and high inventory. The company also said it would cut prices on homes across the country beginning late next week to try to sell off excess inventory. After paying preferred stock dividends, the company reported a loss of $80.5 million, or $1.27 a share, for the quarter that ended July 31.

This was in contrast to a profit of $74.4 million, or $1.15 a share, for the period a year ago. Analysts surveyed by Thomson Financial were expecting Hovnanian to lose 99 cents a share in the quarter. The company, based in Red Bank, N.J., builds luxury homes in 18 states, including California, Florida, New Jersey and New York. In the quarter, Hovnanian incurred $108.6 million in pretax charges for write-offs of land deposits and land value markdowns.

Revenue in the quarter dropped 27 percent, to $1.13 billion, from $1.55 billion a year ago. Hovnanian, said conditions in most of the company’s markets remained challenging. Last week, Fitch Ratings downgraded its credit ratings on several home builders, including Hovnanian, citing the problems in the home mortgage industry. Fitch said the downgrading also reflected negative trends in Hovnanian’s operating margins and deterioration in its credit figures.

Hovnanian’s sales results showed evidence of the continued housing slump as contracts for the third quarter declined 24.2 percent, to 2,539. Hovnanian sold 3,179 completed homes, down 31.2 percent from 4,623 in the third quarter of last year. To try to bolster sales, the company is offering a nationwide three-day sale beginning Sept. Hovnanian will offer deep discounts in each of its 449 communities. In after-hours trading, Hovnanian shares rose 41 cents, or 3.6 percent, to $11.78.

Need to know more? 50% off home delivery of The Times. To find reference information about the words used in this article, double-click on any word, phrase or name. A new window will open with a dictionary definition or encyclopedia entry. 6 (AP) — The luxury-home builder Hovnanian Enterprises reported its fourth consecutive quarterly loss on Thursday, citing continuing problems of credit availability and high inventory.