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Home-Sale Surge Doesn't Reach Toll's Strata

HORSHAM, PA-Toll Brothers' income continues to drop, but so do cancellations.

By Marita Thomas | Updated on May 24, 2007

HORSHAM, PA-Toll Brothers Inc.’s second-quarter and first-half net income and revenues continued their slide, but a drop in canceled contracts was seen as a somewhat positive sign. The luxury homebuilder’s financial report came a day after the government reported a 16% increase in April new home sales, the biggest increase since 1993.

“The increase is taking place below our space,” Robert Toll, chairman and CEO, said during a conference call. “I was surprised to hear the secretary of the Treasury say the hard times are behind us. We have not got the hard times behind us,” he said. Increased sales were at the $200,000 level, he said, in contrast to Toll Brothers’ average prices of $670,000 to $680,000.

Second-quarter and first-half net income was $36.7 million and $91 million, respectively. That compares with records of $174.9 million set in second-quarter 2006 and $338.8 million in the first half of 2006. This year’s second-quarter signed contracts are almost $1.2 billion, down 25% from the same quarter a year ago.

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