RED BANK, N.J. (AP) -- Hovnanian Enterprises' fiscal third-quarter net income fell 76 percent from results a year ago that included a hefty tax benefit. But the homebuilder reported double-digit revenue growth as it raised home prices and delivered more houses.
Its contract backlog, which is a sign of potential future revenue, increased 26.8 percent to $1.03 billion. And the contract cancellation rate declined to 18 percent from 21 percent.
Its stock rose almost 3 percent in midday trading.
After slumping for years, the housing market has shown choppy but steady improvement this year. Last week real estate data provider CoreLogic said that U.S. home prices increased in July from a year ago amid a tight supply of homes for sale.
For the period ended July 31, Hovnanian earned $8.5 million, or 6 cents per share. That's down from $34.7 million, or 25 cents per share, a year earlier. The year-ago results included a $36.5 million tax benefit and a $6.2 million gain on debt extinguishment.
Analysts, on average, expected earnings of 7 cents per share in the latest quarter, according to a FactSet survey.
Revenue for the Red Bank, N.J., company climbed 24 percent to $478.4 million from $387 million. Wall Street was looking for higher revenue of $512.6 million.
Home deliveries rose 8.3 percent to 1,502 homes, while net contracts climbed 1.8 percent to 1,568 homes.
Chairman, President and CEO Ara Hovnanian said in a statement on Monday that home sales softened in July and August as it boosted home prices at the same time that mortgage rates climbed and consumer confidence weakened.
Hovnanian Enterprises Inc. has operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington D.C. and West Virginia.
Its stock added 14 cents, or 2.8 percent, to $5.18 in midday trading. The shares have traded in a 52-week range of $3.07 to $7.43.
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