Monday, December 18, 2006

HOV Cash Flow Used By Operations

HOV results out today. I will post on them, as they have a significant presence in Bubble Town, USA. Looking at their most recent SCF filed with the SEC (on their core operations are clearly not generating positive cash flow results. You would think that during this run up that these numbers would be positive, think again. Here are the last 5 quarters NEGATIVE cash flow from operations:

Cash Flow Used in Operating Activities (in millions):


How much longer can a company continue to operate by losing money on its core operations? Then came the news today that they will also lose money for the quarter.

Hovnanian Enterprises swings to quarterly loss

By Ana Campoy
Dec 18, 2006
SAN FRANCISCO (MarketWatch) -- Hovnanian Enterprises Inc. (HOV :
Hovnanian Enterprises, Inc late Monday said it swung to a fourth-quarter net loss available to shareholders of $117.9 million, or $1.88 a share, as revenue fell and margins narrowed. In the same period last year, the Red Bank, N.J.-based home builder posted net earnings available to shareholders of $165.4 million, or $2.53 a share. Revenue fell 1.5% to $1.75 billion from $1.77 billion. The company expects 2007 per-share earnings of $1.50 to $2, on 16,000 to 18,000 home deliveries. For the first quarter, Hovnanian sees per-share earnings of 5 cents to 10 cents. "We believe that the overall U.S. housing market may hit the bottom in the first half of 2007," said Ara Hovnanian, the company's president and chief executive, in a statement. "However, the housing market is likely to bounce along the bottom for several quarters before pricing and sales pace improves."


Merced Going Quickly said...

Have you seen the CRL report?
They have Btown as the #2 forclosure risk in the U.S.

I've posted on my blog.
Merced is still #1!

smoggiebakersfield said...

They believe after several quarters go by, price & sales will improve... NOT. Homebuilders, Real Estate Agents, ect wish the market will rebound. It's not going to happen. As we head into 2007 the
sh-t is going get deep.

07,08,09 is going to be awesome as we see the whole market take a major dump. Can we say 50% declines?

Anonymous said...

Yeah we can say 50% declines.

Perfect Storm

Anonymous said...

The market is going to drop 20% at a time. Primary lenders are going to take back houses and dump them at 20% less, and those that buy those will default and the primary vendor will again dump it at 20%. Takes 4-6 months for each cycle, but 20% at a time the market is going to crash to where fundamentals are. That is not quite counting the shorts and the long termers. I am talking cascade forecloseures on the same set of properties. I think builders will react by slashing prices buying less $$$ material (cos its dropped too) getting cheaper labor (think starving mexicans opting to just eat instead of eat and drink - BTW they freaking drink modelo - cant they like switch to cheap ass beer. Modelo is $$$) and they will stay ahead of the foreclosure curve.