(To read more on the debt and equity markets, click here.)
HORSHAM, PA-Toll Brothers Inc. reported a 67% drop in first fiscal quarter net income, which fell to $54.3 million, compared with $163.9 million, a record, in the same quarter a year ago. Revenues fell 19% to just shy of $1.1 billion, versus the record of more than $1.3 billion in the prior year's first fiscal quarter.
The cancellation rate was 29.8% during the opening quarter. "That is less than for fourth-quarter 2006, but still well below the historic average of 7%," said Robert Toll, chairman and CEO, during a conference call with analysts.
Asked how long this multiple of historic can-rate levels would continue, Toll said, 55% of the cancellations are from agreements more than one year old. "We were all fooled by the great number of investors who walked instead of closing. Presumably, we've shaken out those agreements and can-rates should go down."
Yet, he said, "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." Asked if he was even less optimistic now than two weeks ago during a preliminary report, Toll acknowledged, "I'm a little more disappointed. New York and the New York suburbs are stronger and I'd now rate California a B or B+, versus an A."
The top-selling weekends for new home sales are President's Day weekend and the one after. "While sales were good," he said, "they didn't have nearly the bump up we'd normally get."
As a result of its falling fortunes, the locally based luxury homebuilder expects to deliver between 6,000 and 7,000 homes in 2007, versus a previous guidance of between 6,300 and 7,300. Total 2007 revenues are expected to reach between $4.2 billion and just short of $5 billion.
Shares of TOL closed at $31.93 a share on Feb. 22, down more than 2.8% for the day following the conference call. The 52-week high of $36.05 a share was reached on March 27, 2006, and the 52-week low of $22.22 a share occurred on July 18.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
