RED BANK, N.J. (AP) -- Hovnanian Enterprises Inc. said Wednesday that it posted a surprise profit in its fiscal second quarter, helped by higher consumer demand for new homes.
For the quarter ended April 30, the Red Bank, N.J.-based homebuilder earned $1.3 million, or 1 cent per share, down 27 percent from $1.8 million, or 2 cents per share, in the same quarter the year before. The year-ago quarter included a $27 million gain on the extinguishment of debt.
Revenue rose 24 percent to $423 million from $341.7 million, helped by stronger demand for new homes.
Analysts, on average, expected a loss of 5 cents per share on $419.7 million in revenue, according to FactSet.
Hovnanian said its number of contracts for new homes, including joint ventures, increased 10 percent, while the dollar value of those contracts rose 22 percent. The company added that it raised home prices in many of its communities, which more than offset higher labor and other costs.
But Hovnanian said that growth slowed in May, with the number of contracts increasing about 6 percent and the dollar value of those contracts rising 13 percent.
Its backlog at quarter-end was up 23 percent from a year earlier to 2,827 homes.
Hovnanian shares rose 17 cents, or 3 percent, to $16.14 in morning trading.
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