Toll Brothers takes smaller fiscal 2Q loss

[May 26, 2010]  HORSHAM, Pa. (AP) -- Luxury homebuilder Toll Brothers Inc. said Wednesday that it took a smaller loss in its second quarter as write-downs of assets decreased.

Contracts and the value of the company's backlog increased for the first time in years, and Toll Brothers said it is seeing increased confidence among buyers.

"It appears our business has finally emerged from the tunnel and into a bit of daylight," said Chairman Robert Toll. He indicated sales have held up in May even though a federal tax credit for first-time homebuyers has expired. Toll said he believes customers are more confident in their job security, their ability to sell their previous homes, and home price trends than they had been.

Toll did not benefit as much from the tax credit as some of its competitors because it sells larger and more expensive houses. But that means it should feel less pain from the recent expiration of the credit. Eligible buyers needed to sign contracts for a home by April 30 and must close those deals by June 30.

The company said it signed contracts for 820 units with a total value of $464.6 million during the second quarter. That's far more than a year ago, and it's also much more than in the first quarter of this year -- the first such increase in four years, according to Toll Brothers. The company's cancellation rate was also the lowest in four years.

The company said it lost $40.4 million, or 24 cents per share, down from $83.2 million, or 52 cents per share. Analysts expected a loss of 23 cents per share, according to Thomson Reuters.

Revenue dropped 22 percent, to $311.3 million from $398.3 million. Analysts expected $321.9 million.

The company says it wrote down the value of its assets by $42.3 million in the quarter, down from $119.6 million in the second quarter of 2009. Toll Brothers also cut its selling and general spending compared with a year ago.

[Associated Press]

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