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Earnings Roundup

Toll Bros. hit by downturn in housing

December 07, 2007|From Times Wire Reports

Toll Bros. Inc., the nation's largest builder of luxury homes, reported its first quarterly loss in 21 years Thursday as the housing downturn that the company called the worst in four decades deepened.

"By many measures, fiscal 2007 was the most challenging of the 40 years that Toll Bros. has been in business," Chief Executive Robert Toll said. He added that 1974 "was perhaps rougher, but the difficult times only lasted one year."

Toll, based in Horsham, Pa., reported a loss of $81.8 million, or 52 cents a share, in its fiscal fourth quarter, compared with net income of $173.8 million, or $1.07, a year earlier.

The company booked a charge of $314.9 million in write-downs, mainly for homes it could no longer sell at a profit. Without the write-downs, the company would have posted profit of 72 cents a share, less than half the $1.49-a-share profit that was posted during the year-earlier period.

The loss was narrower than expected on Wall Street, where analysts polled by Thomson Financial estimated a loss of 77 cents a share.

Revenue fell 35% to $1.17 billion in the quarter that ended Oct. 31, slightly ahead of Wall Street's forecast of $1.166 billion. Net signed contracts -- a measure of future sales activity -- fell 48% to $365.3 million.

Toll Bros. said the market was too volatile to provide earnings guidance. The company, however, expects to deliver 3,900 to 5,100 homes in fiscal 2008 at about $630,000 to $650,000 per home.

For its fiscal year, the company posted net income of $35.7 million, or 22 cents a share, compared with profit of $687.2 million, or $4.17, in 2006. Revenue fell 24% to $4.65 billion. Net signed contracts slipped 33% to $3.01 billion.

Toll shares surged $2.70, or 13%, to $23.42.

The S&P 500 Homebuilders index climbed more than 13% on Thursday, setting a one-day record, according to S&P. The group is still down nearly 59% from a year ago.

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