Hovnanian Enterprises (HOV) stock surged on profit reports for the second quarter of 2012, pushed by a 52% swell in construction orders and a heightened demand for new homes. The homebuilder had previously posted eight straight quarters of losses.
New Jersey’s largest homebuilder reported a second quarter income of $1.8 million, or $0.02 a share, an impressive increase from a loss of $72.7 million, or $0.69 a share, in the same quarter of last year. Revenue was up 34% to $341.7 million.
This defied expectations from analysts, who predicted another loss. The nine analysts surveyed by Bloomberg expected an average loss of $0.32 cents per share on revenue of $299 million.
The company’s net contracts for the quarter increased to 1,775 homes from 1,166 the year before. Contract backlog was up 48% from last year to 2,298 homes. The sales value was up to $762.8 million, an increase of 49%.
CEO Ara Hovnanian said the company sold more homes per community in April 2012 than in any month since the spring of 2006, excluding their September 2007 “Deal of the Century” sales promotion.
“The sales improvements we have experienced are fairly wide-based in terms of geography, price points and buyer profiles. As evidenced by our four consecutive quarters of year-over-year net contract growth for the first time since 2006, we are encouraged that the homebuilding industry may be entering the early stages of a recovery,” he said.