The past 24 hours haven't been kind to Hovnanian Enterprises. Tuesday night, the builder reported a fourth quarter net loss of $469 million. On Wednesday morning, around the time Hovnanian shares were falling on Wall Street, its CEO, Ara K. Hovnanian, told analysts in a conference call that "challenging" market conditions resulted in the builder's first fiscal year loss--$638 million--in a "very long time."

Hovnanian, No. 6 in the 2006 BUILDER 100, also reported total revenues of $4.8 billion for fiscal 2007, down 21.9 percent from the previous year.

But Hovnanian doesn't expect fiscal 2007's losses to repeat in 2008. On Tuesday the New Jersey-based builder boldly said, "The company continues to project positive cash flow from operations in excess of $100 million for fiscal 2008." On Wednesday, its CEO clarified the company's projection.

"[There are] a lot of ups and downs in this industry," he said. "'07 is a very sharp correction, but not unprecedented. The '75 and '81 downturns were quite similar and followed by a sharp upturn."

Since April 2006 the company has reduced its land position 47 percent. And since June 2006 it has slashed 43 percent of it workforce. In order to right the ship, Hovnanian says the builder will continue to reduce costs, although some changes will have to take place in areas the company can't control.

"We need to see the existing home inventories come down further for the market to improve," he explained. In addition, the prices of existing homes need to fall. According to the builder's data, existing home prices are too close to new home prices, which, incidentally, are falling.

"New homes have rolled back to prices of many years ago, before the hyper-market," Hovnanian noted.

Although the builder is reducing costs, the company wants to avoid what some bigger builders have been force to do-reduce their markets. Currently, Hovnanian operates in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia. Its CEO says he intends to stay in all those markets.

"Our current plan is not to shrink our [geographic] footprint but to shrink the size of the foot that's on the footprint," Hovnanian explained. "We plan to pare down our inventory in all of our markets."

At press time, Hovnanian had fallen almost 12 percent, to $7.40 in afternoon trading on the New York Stock Exchange.