HORSHAM, Pa. – Toll Brothers Inc. (NYSE:TOL), a leading builder of luxury homes, today posted net income of $54.3 million for the quarter ended Jan. 31, down 66.9 percent from its year-ago record income of $163.9 million in the first quarter of fiscal 2006.
First-quarter earnings per share declined 66 percent, the company said, to 33 cents per share diluted from the year-ago period’s 98 cents per share. Pre-tax charges affecting the company’s income included write-downs of $96.9 million and a goodwill impairment charge of $9.0 million, related to the company’s 1999 acquisition of the Silverman Cos.; in the year-ago period, pre-tax writedowns totaled $1.1 million. Excluding the writedowns and impairment charge, first-quarter earnings declined 27 percent to 72 cents per share diluted.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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Total revenue for the quarter declined 19 percent to $1.09 billion, from $1.34 billion in the first quarter of fiscal 2006. The end-of-quarter backlog declined 30 percent to $4.15 billion, from the year-ago period’s record $5.95 billion.
The dollar value of net signed contracts declined 34 percent to $748.7 million, from the year-ago quarter’s $1.14 billion. The company signed 1,463 contracts in the quarter (before cancellations), 14 percent fewer than in the first quarter of fiscal 2006.
Net contracts for the first quarter of fiscal 2007 totaled 436 units, down from 585 units in the fourth quarter of fiscal 2006. But the first-quarter cancellation rate of 29.8 percent was lower than the preceding quarter’s 36.9 percent, though still well above the company’s historical average of about 7 percent.
“There are too many soft markets at this stage of the selling season to call a general upturn in the new home market,” said Chairman and CEO Robert I. Toll. “Demand varies greatly from week to week in individual markets.” But, he added, “We believe that pent-up demand is building in many markets as potential buyers bide their time until they are confident prices have firmed.”
Toll Brothers’ shares declined on the news, losing 93 cents to $31.93, Bloomberg News said. The largest company pared its earnings forecast for the fiscal year to $1.46 to $1.85 a share from its earlier estimate of $1.58 to $2.08, and predicted it will deliver 6,000 to 7,000 houses, down from as many as 7,300.
Additional information is available at www.tollbrothers.com.
