Toll reports third straight loss
A carpenter waits on a roof rafter on top of a Toll Brothers home under construction in Cary, North Carolina. Bloomberg News |
Toll Brothers Inc, the largest US luxury-home builder, reported its third straight quarterly loss as tumbling demand for new homes forced the company to write down land values.
The net loss for the fiscal second quarter ended April 30 was $93.7 million, or 59 cents a share, compared with a profit of $36.7 million, or 22 cents, a year earlier, the Horsham, Pennsylvania-based company said yesterday in a statement. Toll was projected to report a loss of about 90 cents a share, according to the average estimate of 11 analysts in a Bloomberg survey.
New-home sales in April were the second-lowest since 1991 as tighter lending standards reduced demand. The housing market's weakness is making it more difficult for potential buyers of Toll houses to sell their homes to pay for the purchase.
Toll fell 11 cents to $20.96 in New York Stock Exchange composite trading on Monday. The shares have declined 27 percent in 12 months.
Homebuilding revenue dropped 30 percent in the fiscal second quarter to $818 million, Toll said May 13. That beat the average estimate of $741 million from analysts surveyed by Bloomberg.
The S&P/Case-Shiller home-price index dropped 14.4 percent in March from a year earlier, the most since the figures were first published in 2001.
Lower prices
The average price of net contracts signed in the second quarter was $534,000, down 26 percent from a year earlier and 7.9 percent lower than in the previous three months, Toll said on May 13 when it reported preliminary results for the period. The lower sales prices were partly due to fewer sales in expensive markets such as California and Manhattan, Toll said.
The company said on May 13 that customers canceled 25 percent of contracts in the three months ended April 30, the lowest rate since the same quarter a year earlier, when they withdrew from 19 percent. The net value of contracts fell 58 percent to $496 million from a year earlier. The order backlog, or homes under contract that have yet to be sold, declined 50 percent to $2.08 billion.
Sales of new homes increased 3.3 percent in April after readings for the prior month were revised lower, the Commerce Department said on May 27. The April sales pace was an annual 526,000 homes, compared with an annual rate of 509,000 in March that was the lowest in 17 years.
US foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as mortgage industry efforts to modify loans fell short.
More than 243,300 properties were in some stage of foreclosure, the highest monthly total since RealtyTrac Inc, a seller of default data, began in January 2005. One in every 519 households received a filing and Nevada, California and Florida had the highest rates. Filings rose 4 percent from March, RealtyTrac said on May 14.
Agencies
(China Daily 06/04/2008 page16)