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Debt-laden Hovnanian plans massive note sale to fund tender offer

Hovnanian Enterprises Inc. (NYSE: HOV) announced Monday morning that it will sell up to $775 million (WSJ subscription required) of seven-year notes in order to fund its previously reported tender offer for up to $759.3 million in debt. The struggling homebuilder also reported that $877 million of the notes were tendered by the early deadline on Friday. As a result, Hovnanian reduced the maximum amount of unsecured notes it will buy from $130 million to $100 million.

Last week, a Wall Street Journal article noted that Hovnanian is "hobbled" by its debt, even as the rest of the industry is ready to buy up land at a bargain. As of July 31, Hovnanian's net debt accounted for 109% of total capital, compared to an average of 26% for the dozen major homebuilders tracked by research firm Zelman & Associates.

Continue reading Debt-laden Hovnanian plans massive note sale to fund tender offer

Cramer on BloggingStocks: Missing the big picture

TheStreet.com's Jim Cramer says don't heed the pundits -- allow yourself to believe things are improving.

Skeptical, or impossible? That's how I am posing the dilemma of the "pull through" argument whether it involves Ford (NYSE: F) (Cramer's Take) and "Cash for Clunkers" or Hovnanian (NYSE: HOV) (Cramer's Take), Lennar (NYSE: LEN) (Cramer's Take), Toll (NYSE: TOL) (Cramer's Take), KB Home (NYSE: KBH) and Pulte (NYSE: PHM) (Cramer's Take) and the $8,000 tax credit.

Right now any time there is a stimulus program of any sort, the pundits/media/money managers all decide the most important single issue isn't what it will do to the numbers, or whether it will work at all, but what will it do to the "pull through." How much of future sales will it "steal"?

Continue reading Cramer on BloggingStocks: Missing the big picture

Earnings highlights: Ciena, Del Monte, Hovnanian, Krispy Kreme, Movado ...

Here are some highlights from last week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Ciena, Del Monte, Hovnanian, Krispy Kreme, Movado ...

Hovnanian shares slide on earnings, housing woes

Shares of home-builder Hovnanian Enterprises Inc. (NYSE: HOV) fell sharply in trading Thursday, a day after the company reported a bigger loss than Wall Street had anticipated. By early afternoon, shares of the New Jersey-based company had fallen more than 13% to just over $4 a share.

In reporting its fiscal third quarter earnings Wednesday, Hovnanian said it lost $168.9 million, or $2.16 a share, in the three months ending July 31. That compares with a loss of $202.5 million, or $2.67 a share, in the year-earlier period. Revenue fell 45% to $387.1 million. The company noted its latest quarterly results included $105.7 million in pretax charges to reflect the declining value of land and other assets.

Continue reading Hovnanian shares slide on earnings, housing woes

Analyst upgrades, downgrades and initiations: AAPL, APC, CAB, DE, HOV, MVL ...

Analyst upgrades:

  • FBR Capital upgraded Anadarko Petroleum (NYSE: APC) to Outperform from Market Perform to reflect upcoming catalysts and the company's opportunity in subsalt. FBR raised its target on shares to $60 from $50.
  • Citigroup upgraded Marvel (NYSE: MVL) to Hold from Sell on expectations the acquisition by Disney (NYSE: DIS) will close. The firm raised its target on shares to $50 from $31.
  • JPMorgan upgraded Cubic (NYSE: CUB) to Overweight from Neutral on expectations the company will benefit from the Vix ERG acquisition and increased sales visibility. The firm raised its target on shares to $43 from $38.
  • Siemens (NYSE: SI) was upgraded to Outperform from Market Perform at Bernstein.
  • Deutsche Telekom (NYSE: DT) was upgraded to Neutral from Underperform at Credit Suisse.
  • Thompson Creek (NYSE: TC) was upgraded to Sector Outperformer from Sector Performer at CIBC.

Continue reading Analyst upgrades, downgrades and initiations: AAPL, APC, CAB, DE, HOV, MVL ...

Toll Brothers earnings preview: A big Q3 loss expected

Luxury homebuilder Toll Brothers Inc. (NYSE: TOL) is scheduled to discuss its fiscal third-quarter 2009 results tomorrow in a conference call at 2:00 PM ET hosted by CEO Robert I. Toll. You can catch the live webcast of the call on the company's website.

Recent good news about the housing sector ought to be good news for homebuilders such as Toll Brothers. Yet, for the three months that ended July 31, analysts surveyed by Thomson Reuters expect the Pennsylvania-based company to report that its net loss widened to $1.74 per share from $0.18 per share a year ago. That largely due to the fact that revenue for the quarter is expected to have fallen 42.3% to $460.2 million, because of of falling home prices, tighter mortgage lending standards, and rising unemployment.

Continue reading Toll Brothers earnings preview: A big Q3 loss expected

The week in preview: End-of-quarter earnings expectations: Nike, Oracle, Walgreen ...

This week brings a small flurry of end-of-the-calendar-quarter earnings reports. And for the most part, the expectations of the analysts surveyed by Thomson Reuters aren't very high. Companies expected to report declining earnings in the most recently concluded quarter include America's Car-Mart Inc. (NASDAQ: CRMT), Bed Bath & Beyond Inc. (NASDAQ: BBBY), ConAgra Foods Inc. (NYSE: CAG), Jabil Circuit Inc. (NYSE: JBL), Jackson Hewitt Tax Service Inc. (NYSE: JTX), Monsanto Co. (NYSE: MON), and Sonic Corp. (NASDAQ: SONC).

Continue reading The week in preview: End-of-quarter earnings expectations: Nike, Oracle, Walgreen ...

Earnings highlights: Google, KKR, Krispy Kreme, Williams-Sonoma, Guess? and more

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Google, KKR, Krispy Kreme, Williams-Sonoma, Guess? and more

Hovnanian's Q1 shows an improvement

Hovnanian Enterprises (NYSE: HOV), a home builder whose related companies include Toll Brothers (NYSE: TOL), Lennar Corp. (NYSE: LEN), and D.R. Horton (NYSE: DHI), reported Q2 results on Tuesday after the bell. The company reported a loss of $1.50 per share (the results included a gain related to debt extinguishment). That unfortunately did not meet analyst expectations according to Trey Thoelcke's earnings preview. Analysts were looking for a loss of $1.26 per share.

However, things do look better. Last year at this time, the loss recorded by Hovnanian was a whopping $5.29 per share. Revenues, however, plummeted to $398 million from over $770 million. Analysts were expecting only $348 million according to the preview.

Continue reading Hovnanian's Q1 shows an improvement

Home builders expected to post narrower losses, declining revenue

Still wondering whether the housing market has bottomed? Well, the next couple of days should offer some clues, as pending home sales numbers for April are due out later this morning, and home builders Hovnanian Enterprises Inc. (NYSE: HOV) and Toll Brothers Inc. (NYSE: TOL) will be releasing their quarterly results. While both are expected to have narrowed their losses, their revenues are expected to have shrunk by half, as well.

Continue reading Home builders expected to post narrower losses, declining revenue

The week in preview: DynCorp, Joy Global, Shanda and more

Much of the attention this week will no doubt be on how the impending General Motors (NYSE: GM) bankruptcy will shake out, as well as the usual economic concerns: Has the housing market bottomed? Will oil prices keep rising? Is the employment situation getting any better? And so on (see highlights of the economic calendar below).

What probably won't get much attention are quarterly earnings, as the earnings season for this quarter winds down. But there are a few reports that analysts surveyed by Thomson Reuters have high hopes for.

Continue reading The week in preview: DynCorp, Joy Global, Shanda and more

The week in preview: Bernanke, earnings winners, and Raymond James conference

After testifying before a Senate committee about AIG (NYSE: AIG) last week, the Fed's Ben Bernanke participates in a Council of Foreign Relations event Monday evening.

Economic data due to be released this week include wholesale trade and job vacancies for January on Tuesday morning, the U.S. Treasury budget for February on Wednesday, retail sales for February and business inventories for January on Thursday morning, and the U.S. trade balance for January on Friday morning.

Continue reading The week in preview: Bernanke, earnings winners, and Raymond James conference

U.S. stimulus plan may give home builders a lift

One of the programs which may come with the new economic stimulus package is a big tax credit for people who buy new homes. It would help potential buyers across almost every income class, which is not what was being contemplated a few days ago. According to Bloomberg, "By replacing a $7,500 tax credit for first-time homebuyers earning less than $150,000 with a $15,000 break for all income groups as part of the economic stimulus package, senators effectively are encouraging purchases by higher-income households with a reduced risk of default."

Last week, Moody's said it was reviewing debt ratings on four home builders, including Beazer (NYSE: BZH) and Hovnanian (NYSE: HOV), for downgrades. That did not do the shareholder in the companies any favors.

Continue reading U.S. stimulus plan may give home builders a lift

New data: No recovery in home-building stocks

Homeowners lost $3.3 trillion in the value of their houses last year. A report from Zillow.com, picked up by Bloomberg, said that national home prices dropped 11.6% compared to 2007.

That makes stocks like Hovnanian (NYSE: HOV) and Beazer (NYSE: BZH) sells, even at current depressed levels. HOV shares are down to $1.64 from a 52-week high of $13.50. Beazer is off from a high of $12.40 to $0.98. The company could even face delisting over the next year if it cannot get its share price up.

There is a temptation to think that home-building stocks are so inexpensive that, if the companies can drop inventory prices enough, they can start to improve sales, even if the margins on each home sold are poor. But it is not that simple.

Continue reading New data: No recovery in home-building stocks

The week in preview: Looking for good news

With the increasingly regular announcements of layoffs and plant closings, it's clear that the recession is deepening. One clue to the economy's future direction that investors may be watching for is the upcoming earnings release of FedEx Corp. (NYSE: FDX). The world's largest delivery service has been considered an economic bellwether, and it just may have benefited recently from lower fuel prices and the announced departure of rival DHL from the U.S. package market.

For the company's fiscal second-quarter 2009 report, analysts surveyed by Thomson Reuters on average expect to see earnings of $1.57 per share, about 2% higher than in the year-ago period, and 21.7% higher than in the previous quarter. That's about the same as the $1.58 per share FedEx forecast in preliminary results last week. Analysts expect revenues for the quarter ended November 30 to total $9.8 billion, 3.9% more than a year ago. The Memphis-based company has only fallen short of earnings expectations in one of the past five quarters, and exactly matched estimates back in the first quarter.

As part of its expansion plans, FedEx broke ground on a new Portland hub in October, and said that a new facility in China will be fully operational in the first half of 2009. The company continues to make service improvements, and declared a quarterly dividend in November. But in its preliminary results, FedEx lowered its full-year forecast, citing continued weakness in the economy.

Continue reading The week in preview: Looking for good news

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Last updated: November 09, 2009: 11:26 PM

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