("Toll Brothers 3Q Loss Widens; Sees Signs For Optimism
>TOL," published at 5:48 a.m. EDT, misstated the day the results
were reported in the sixth paragraph. A corrected story
follows.)
DOW JONES NEWSWIRES
Toll Brothers Inc.'s (TOL) fiscal third-quarter loss widened
sharply on tax charges and write-downs, but the nation's largest
luxury-home builder said it sees signs that the housing market is
stabilizing.
For the quarter ended July 31, the company posted a loss of
$472.3 million, or $2.93 a share, compared with a prior-year loss
of $29.3 million, or 18 cents a share.
The latest results included federal and state deferred tax asset
valuation allowances of $439.4 million, and pretax inventory and
joint-venture-related write-downs totaling $115.0 million, while
the previous year's results included $139.4 million in
write-downs.
Excluding write-downs, Toll reported a pretax profit of $3.7
million for the quarter, compared with year-earlier pretax profit
$84.6 million.
Earlier this month, the company said revenue decreased 42% to
$461.3 million. It added net orders surprisingly rose 3.1%,
although they fell 4.7% in dollar terms. The cancellation rate fell
to 8.5% from 19% a year earlier.
Toll Brothers said Thursday that while its third-quarter results
reflect continuing challenging market conditions, "we do see signs
for optimism." The company said declining cancellations and more
solid demand indicate that the housing market is stabilizing.
"We are reducing incentives and raising prices in selected
communities," said Chairman and Chief Executive Robert I. Toll. "We
believe that customers are recognizing that now is the time to get
into the market to take advantage of near-record affordability and
what is still, for now, a buyer's market."
The company said that four weeks into its fourth quarter, its
per-community deposits, the non-binding precursor to signed
contracts, are running 26% ahead of the year-ago period.
Toll Brothers said it now expects to deliver between 2,580 and
2,830 homes in its current fiscal year, compared with its June view
of 2,200 to 2,800 homes.
The company expects to deliver between 475 and 725 homes in the
fourth quarter at an average delivered price of $550,000 and
$575,000 apiece.
Toll Brothers previously forecast an average delivered price of
$590,000 to $600,000 for the fiscal year.
Toll Brothers shares closed at $23.14 Wednesday, up 3.7%. Having
risen 70% since a five-year low in November, the stock is trading
slightly above prior-year levels.
-By Joan E. Solsman and Colin Kellaher, Dow Jones Newswires;
212-416-2291; joan.solsman@dowjones.com