Shares of Hovnanian Enterprises (NYSE:HOV) plummeted 5.78% in intraday trading on Tuesday following the release of its fiscal second-quarter results that fell short of expectations. The homebuilder reported a significant decline in profit as revenue slipped and costs rose, disappointing investors.

Hovnanian posted a profit of $19.7 million, or $2.43 per share, for the three months ended April 30, compared with $50.8 million, or $6.66 per share, in the same quarter a year earlier. This represents a substantial 61.2% year-over-year decrease in net income. Revenue declined 3.1% to $686.5 million, missing analyst estimates of $733.20 million. Meanwhile, costs and expenses increased by 3%, further squeezing the company's margins.

Chief Executive Ara Hovnanian acknowledged that the company didn't achieve all of its financial guidance during the quarter. However, he noted that Hovnanian has grown its land position by almost 50% over the past two years, which could lead to significant revenue growth if stronger demand returns to the housing market. Despite this long-term optimism, the immediate market reaction reflects investors' concerns about the company's current performance and the broader challenges facing the housing sector.