Toll Brothers Cuts Estimate
For 4th-Period Home Deliveries
MarketWatch
August 9, 2006
Toll Brothers Inc. reduced its estimate of the number of homes to be delivered in the current fiscal fourth quarter while saying it would take write-downs for the value of land options on "deals that no longer work due to today's weaker market conditions and slower sales paces."
Robert Toll, chairman and chief executive, cited an oversupply of houses for sale and a fall-off in buyer confidence as the Horsham, Pa.-based builder of luxury homes disclosed revenue figures for the third quarter ended July 31.
The current housing slowdown "is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors," the executive said in a statement.
Third-quarter revenue came in at $1.53 billion, off 0.5% from $1.54 billion in the year-earlier period, Toll Brothers said.
Based on its current backlog, Toll expects to deliver 2,500 to 2,800 homes in the fourth quarter, down from its previous estimate of 2,900 to 3,300. For 2006, home deliveries are expected at 8,600 to 8,900. Toll Brothers said that its July 31 backlog totaled $5.59 billion, down 13% from the year-earlier $6.43 billion.
Signed contracts were $1.05 billion at the quarter end, down 45% from $1.92 billion. Toll said it would specify the write-downs when it formally reports third-quarter financial results on Aug. 22.
With builders cutting prices and adding incentives to move homes they are close to completing, "many anxious consumers are delaying their purchase decisions as they wonder about the direction of home prices," Mr. Toll said.
"With interest rates still relatively low, the economy basically healthy and household formations still increasing, we believe that once the current oversupply of homes is absorbed and buyers become confident that home prices have stabilized, the market will return to firm footing."
For 4th-Period Home Deliveries
MarketWatch
August 9, 2006
Toll Brothers Inc. reduced its estimate of the number of homes to be delivered in the current fiscal fourth quarter while saying it would take write-downs for the value of land options on "deals that no longer work due to today's weaker market conditions and slower sales paces."
Robert Toll, chairman and chief executive, cited an oversupply of houses for sale and a fall-off in buyer confidence as the Horsham, Pa.-based builder of luxury homes disclosed revenue figures for the third quarter ended July 31.
The current housing slowdown "is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors," the executive said in a statement.
Third-quarter revenue came in at $1.53 billion, off 0.5% from $1.54 billion in the year-earlier period, Toll Brothers said.
Based on its current backlog, Toll expects to deliver 2,500 to 2,800 homes in the fourth quarter, down from its previous estimate of 2,900 to 3,300. For 2006, home deliveries are expected at 8,600 to 8,900. Toll Brothers said that its July 31 backlog totaled $5.59 billion, down 13% from the year-earlier $6.43 billion.
Signed contracts were $1.05 billion at the quarter end, down 45% from $1.92 billion. Toll said it would specify the write-downs when it formally reports third-quarter financial results on Aug. 22.
With builders cutting prices and adding incentives to move homes they are close to completing, "many anxious consumers are delaying their purchase decisions as they wonder about the direction of home prices," Mr. Toll said.
"With interest rates still relatively low, the economy basically healthy and household formations still increasing, we believe that once the current oversupply of homes is absorbed and buyers become confident that home prices have stabilized, the market will return to firm footing."
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