(Source: Wall Street Journal)
When home builders Hovnanian Enterprises Inc. and Toll Brothers Inc. report results this week, industry watchers will be looking for any signs of resurgence in a sector that has been on life support for years.
The home-building sector has been slammed in part because of oversupply of new and existing homes in recent years, which was followed by a steep increase in loan delinquencies and defaults.
Luxury home builder Toll Brothers and family-controlled Hovnanian have reported a string of losses, with Toll Brothers last reporting a profit nearly two years ago and Hovnanian having a 10-quarter streak of red ink.
Hovnanian will issue its results on Tuesday, with Toll Brothers reporting a day later. Wall Street expects both to post narrower fiscal-second-quarter losses, as write-downs have seemed to lessen for many in the sector. Still, the companies have remained in the red as revenue tumbles on still-falling orders and prices. Competition from cheaper foreclosed real estate also makes it hard to unload properties.
Read John Kell’s full article “Home Builders’ Losses Expected to Narrow” in the Wall Street Journal (June 1, 2009).