Toll Brothers' Q4 Bottom Line Turns Red

HORSHAM, PA-The deteriorating housing market has dealt Toll Brothers Inc. the first net loss in its 21 years as a public company. The locally based luxury homebuilder posted a loss of $81.8 million for its fiscal 2007 fourth quarter, compared with net income of $183.8 million in the same quarter of 2006.

The loss included $314.9 million of pretax write-downs on the value of its land. During a conference call, Joel Rassman, CFO, wouldn’t rule out further write-downs and, based on that possibility plus continuing uncertainty in the housing market, declined to provide a 2008 earnings guidance. He did say, however, that the company expected to deliver between 3,900 and 5,100 homes in the next fiscal year.

Fourth-quarter net signed contracts were $365.3 million, versus $706.3 million in the final fiscal quarter of 2006. Total revenues were nearly $1.2 billion, down from more than $1.8 billion in the same period a year ago. There were 417 cancellations during fourth quarter, which represents 38.9% of the contracts signed.