By Adriano Marchese

Hovnanian Enterprises faced higher costs and lower margins in its fourth quarter, dragging the company to a loss.

The U.S. homebuilding company on Thursday posted a net loss of $667,000, or 51 cents a share for the three months ended Oct. 31, compared with a profit of $94.3 million, or $12.79 a share, in the same quarter a year ago.

Margins in the quarter were lower. Homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 10.7% compared with 18% a year earlier.

The company also incurred losses related to the early extinguishment of debt and land charges of $52.9 million, as well as higher costs, with total sales, general and administrative expenses of $91.5 million, up from $87.7 million a year earlier.

Total revenue came to $817.9 million, down from $979.6 million, within its guidance of between $750 million and $850 million.

Consolidated contracts in the quarter decreased 10.8% to 1,209 homes compared with 1,355 homes in the same quarter last year.

Hovnanian's neighborhoods sold fewer homes on average, it said. Consolidated contracts per community declined to an average of 8.6 per community from about 10.4 a year earlier, representing a 17.3% decline.

Looking ahead to the fiscal first quarter, Hovnanian expects total revenue to be between $550 million and $650 million.

It also set guidance for adjusted homebuilding gross margin to be between 13% and 14%, and adjusted income before income taxes of $10 million to $20 million.

Adjusted earnings before interest, taxes, depreciation and amortization is forecasted to be between $35 million and $45 million.

Hovnanian shares were down 11% to $118.78 in recent trading.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

December 04, 2025 09:54 ET (14:54 GMT)

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