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RED BANK, NJ-It may be one small step for the troubled housing business, and Hovnanian Enterprises’ preliminary Q2 results remain decidedly mixed overall, but the company says that it has achieved positive cash flow a quarter earlier than predicted. Officials of the locally-based company have also revised their full-year cash flow guidance substantial upwards from the earlier $100 million to “greater than $300 million.

“As a result of management’s continued focus and progress in reducing inventory investment levels and generating cash flow, the company is increasing its projection for positive cash flow in fiscal 2008…,” says a statement issued by the company. “The company achieved positive cash flow in the second quarter, one quarter earlier than previously anticipated. Net debt was reduced by approximately $30 million in the second quarter.”

The preliminary results follow several quarters in which the company posted operating losses, including a $469-million loss in 2007′s Q4. And the latest results, despite the positive news, remain mixed. While the cancellation rate improved slightly from 32% of gross contracts, it was still 29%, company officials report.

And Hovnanian’s home deliveries were off 21% year-over-year. Company officials also reported that Hovnanian would take between $225 million and $275 million of land-related pretax changes, an increase from Q1′s $94 million.

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