boligbyggeri
Toll Brothers 1Q Profit Falls 67 Percent
Thursday February 22, 8:48 am ET
Toll Brothers First-Quarter Profit Plunges 67 Percent to $54.3 Million Due to Hefty Writedowns
PHILADELPHIA (AP) -- Luxury-home builder Toll Brothers Inc. said Thursday its first-quarter profit dropped 67 percent due to hefty writedowns and other costs, and CEO Robert Toll said there are still too many soft markets.
ADVERTISEMENT
Quarterly earnings declined to $54.3 million, or 33 cents per share, from $163.9 million, or 98 cents per share, during the same period a year ago.
The latest quarter includes a goodwill impairment charge of $9 million related to Toll's 1999 acquisition of the Silverman Cos. in Detroit. Results also were hurt by $96.9 million in costs to write down the value of land or housing stock the company no longer believes it can sell at a profit, versus writedowns of just $1.1 million in the prior-year period.
Analysts polled by Thomson Financial were looking for net income of 29 cents per share.
Quarterly revenue slipped 19 percent to $1.09 billion versus $1.34 billion in the previous year, meeting Wall Street's expectations.
States in the North showed the biggest decline for Toll, down 32 percent, followed by the West and the Mid-Atlantic states. The South had the smallest dip.
First-quarter net signed contracts slid 34 percent to $748.7 million. The West had the weakest showing, down 59 percent, followed by the Southern states, the Mid-Atlantic and the North.
"There are too many soft markets at this stage of the selling season to call a general upturn in the new home market. Demand varies greatly from week to week in individual markets," Chairman and Chief Executive Robert I. Toll said in a statement.
The company's first-quarter cancellations totaled 436 units, down from 585 units in the 2006 fourth quarter. Toll said its cancellation rate of 29.8 percent was lower than the fourth-quarter's 36.9 percent rate but still well above the company's historical average of about 7 percent.
Looking ahead, Toll expects to deliver between 6,000 to 7,000 homes this year, down from the prior projection of 6,300 to 7,300.
It expects home building revenue of $4.2 billion to $4.96 billion and net income of $240 million to $305 million, or $1.46 to $1.85 per share. Wall Street analysts were expecting profit of $1.46 per share.
But the company cautions that the earnings projection is based on $60 million in estimated writedowns for the remaining three quarters, but the actual figure could be "significantly" higher or lower.
Shares of Toll fell 31 cents, or nearly 1 percent, to $32.55 in pre-market trading. The stock closed at $32.86 on Wednesday on the New York Stock Exchange.