Wednesday, March 11, 2009

Hovnanian Gives Latest Negative Earnings Surprise

The carnage in homebuilders continues. Hovnainan posted a $2.29 loss, substantially worse than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 consensus estimate of -$1.56 after "joblessness climbed and prospective buyers waited for prices to quit falling." Paul Puryear, director of real estate research at Raymond James had some additional choice words: "A couple of builders are on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 critical list, Hovnanian being one. The No. 1 driver of household formation is job growth and job growth is negative. We need to turn that around." Lastly, owner Ara Hovnanian gave his 2 cents on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 lack of light at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 end of tunnel of 10 consecutive quarterly losses

"Given cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 lack of steps taken by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 federal government to address housing demand, prospective home buyers are still faced with making cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 decision to buy a home against an exceedingly difficult economic backdrop. We expect demand for all homes, both new and existing, to remain far below normalized levels. While we have experienced a typical, seasonal pickup in traffic and sales since cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 middle of January, this increase is coming off of extremely low levels that have prevailed since mid-September,”
Hovnanian, which features prominently on Moody's infamous death list, was downgraded on March 6 to Caa1 from B3 with cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 following caution "Government actions will be helpful largely at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 margin liquidity will remain tight and lender behavior uncertain, and2009 will be a year of greatly reduced deliveries."

Which leads us to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 broader real estate, both residential and commercial, space of which we think cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 REIT sector is most poised for some dramatic downside surprises (one only needs to look at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 GGP soap opera for a good idea of just how bad things really are). The only potential saving grace would be whecá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 U.S. decides cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 REITs are cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 next sector it considers too big to fail (more on this in a subsequent post). However, as we have seen with what happens to ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r sectors to which cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 government decides to provide its helping hand, this too could be a two edged sword. Sphere: Related Content
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