Toll Bros. loses $111 million in Q4, but sees hope

[December 03, 2009]  HORSHAM, Pa., (AP) -- Toll Brothers Inc. lost $111.4 million in the fiscal fourth quarter, but the luxury homebuilder is seeing signs of a turnaround in the housing market.

The company's loss of 68 cents a share was largely due to continued write downs on the value of its land holdings and staff reductions. Excluding those charges, the builder almost broke even. In the year-ago quarter, which included a larger amount of write downs, Toll lost $78.8 million, or 49 cents a share.

Revenue fell 30 percent to $486.6 million from $691.1 million.

Analysts polled by Thomson Reuters were expecting a loss of 46 cents a share on revenue of about $450.1 million.

Investors, however, are expected to focus on Toll's 42 percent jump in new sales contracts and a healthy cancellation rate of just 7 percent.

The industry has been buoyed by an $8,000 federal tax credit for first-time homebuyers, which was extended last month and expanded to include $6,500 for existing homeowners. That was especially good news for Toll, whose luxury homes are marketed to buyers looking to trade up from their existing homes.

Sales of new homes have increased six out of the past seven months, according to government data. They dipped in September, but surged in October to the highest level in more than a year.

"The choppiness in demand that began after Labor Day, following a stronger period from late March through late August, has continued," Robert Toll, chief executive officer, said in a statement. "This is consistent with recent weaker economic news. Since the holiday season is not typically the busiest time to be purchasing or selling homes, we suspect the housing market may be following seasonal buying patterns."

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On the Net:

Toll Brothers: http://www.tollbrothers.com/

[Associated Press]

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