RED BANK, N.J. (AP) -- Hovnanian Enterprises Inc. on Thursday posted a surprise fiscal third-quarter profit, reversing a loss in the same quarter last year, boosted by a hefty tax gain and a jump in revenue.
For the quarter ended July 31, the Red Bank, N.J.-based homebuilder's net income was $34.7 million, or 25 cents per share, compared with a loss of $50.9 million, or 47 cents per share, in the same quarter last year.
The recent quarter's results included the reversal of $36.5 million in state tax reserves, the company said.
The profit came in well ahead of Wall Street predictions. Analysts, on average, expected a loss of 14 cents per share, according to a FactSet poll.
Revenue rose 35 percent to $387 million from $285.6 million, while analysts expected $413.2 million.
Hovnanian said that despite a continued weak U.S. economy, demand for new homes was resilient through the spring and summer months, which could indicate that demand for new homes may have hit bottom and has already embarked on a gradual recovery.
The company said the dollar value of its net contracts rose 32 percent from year-ago levels, to $507 million, while the number of net contracts rose 19 percent to 1,541 homes. Deliveries rose 25 percent to 1,387 homes, while the company's cancelation rate edged up 2 percentage points to 21 percent.
The company said the growth continued in August, as the dollar value of net contracts rose 49 percent to $166.8 million and the number of contracts increased 26 percent to 484 homes.
Hovnanian shares fell 6 cents to $3.15 in midday trading.