"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.