Q2 2024 Hovnanian Enterprises Inc Earnings Call Transcript
Key Points
- Hovnanian Enterprises Inc (HOVNP.PFD) reported revenues of $708 million, which was within their guidance range.
- The adjusted gross margin for the quarter was 22.6%, at the upper end of their guidance range.
- Adjusted EBITDA was $102 million, significantly above the high end of their guidance range.
- The company achieved a 51% increase in adjusted pretax profit to $70 million year-over-year.
- Hovnanian Enterprises Inc (HOVNP.PFD) has a strong focus on cost reduction, with a 6% year-over-year decrease in average base construction costs per square foot.
- The company faces challenges with fluctuating mortgage rates, which makes forecasting difficult.
- There are delays in utility hookups affecting the community count growth.
- A significant percentage of homebuyers (73%) are using mortgage rate buydowns, indicating affordability issues.
- The company’s stock is trading at a significant discount compared to peers, despite strong financial performance.
- Hovnanian Enterprises Inc (HOVNP.PFD) has a higher net debt to capital ratio (55%) compared to some peers, which may affect investor perception.
Good morning and thank you for joining us today for Hovnanian Enterprises fiscal 2024 second quarter earnings conference call. An archive of the webcast will be available after the completion of the call and run for 12 months. This conference is being recorded for rebroadcast and all participants are currently in a listen only mode. Management will make some opening remarks about the second quarter results and then open the line for questions.
The company will also be webcasting a slide presentation along with the opening comments from management. The slides are available on the investors page of the company's website at www.khov.com. Those listeners who would like to follow along should now log on to the website. I would like to turn the call over to Jeff O'Keefe, Vice President, Investor Relations. Jeff, please go ahead.
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Thank you, Carmen, and thank you all for participating this morning's call
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