Hovnanian Enterprises Inc. of Red Bank, N.J., New Jersey's largest home builder, could go out of business "absent a miracle" that bolsters its equity and cash reserves, Vicki Bryan, a bond analyst at Gimme Credit LLC said. Hovnanian denied it was in trouble.

"In 2008, builders generated billions of dollars in tax refunds, asset sales and in savings by not buying land for development," Ms. Bryan wrote in a report published Friday. "These lucrative sources will not be available on the same scale this year, and there is little room to cut costs as revenue declines further."

Hovnanian's chief financial officer, Larry Sorsby, wrote in an e-mail: "It seems odd that an analyst would not understand that we ended fiscal 2008 with over $800 million in cash and only have $100 million of debt maturing before 2012. We have weathered many industry downturns during our 50-year history and strongly believe we have the liquidity to weather the current downturn as well."

The company said it generated $175 million in cash in the fiscal fourth quarter, which ended Oct. 31. It had $838 million in cash at that time. The builder has not turned a profit since the first quarter of fiscal 2007.

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